Accenture to forge connection between utilities and city authorities

Accenture has taken an initiative to accelerate the introduction of smart grids by connecting utilities and city authorities that are committed to deploying the same.

Called The Accenture Intelligent City Network, the initiative connects utility executives and metropolitan leaders to exchange knowledge and practical experience related to planning, challenges and advantages of smart-grid technology.

The focus will be on creation of blueprints for the deployment of smart grids, including the integration of smart grids with broader investments in intelligent infrastructures, such as smart buildings and transportation, as well as new technologies and emerging standards.

Accenture believes that city authorities are in the best position to coordinate with the public- and private-sector stakeholders to transform the energy consumption habits of local communities.

Initial members of the Accenture Intelligent City Network include Xcel Energy, East China Grid Co., a Chinese transmission company; Russian Interregional Distribution Grid Company of Centre (MRSK of Centre), which will be creating an “intelligent” city in Belgorod in collaboration with the regional government; Dutch utility Alliander N.V. and the City of Amsterdam.

Mike Carlson, Xcel Energy’s vice president & chief information officer, said that energy management, customer service and environmental management strategies can all be enhanced with smart-grid technologies and through a partnership between utilities and city and state regulatory leaders.

Related links: Accenture, Utilities, Intelligent infrastructure, Xcel Energy, energy management

Consert opts for Marlabs as its technology partner

Consert, Inc. has chosen Marlabs to build a smart grid energy management solution, which will allow a utility to better manage overall energy usage.

Marlabs stated that such an integrated smart grid solution - benefiting both the utility and its consumers – “will be a first for the industry”.

According to Consert, a specialist in designing and implementation of intelligent energy distribution and management solutions, the solution from Marlabs will not only provide savings of up to 15 percent to families and small businesses, but actually allow distributing utilities to lower demand peaks.

Marlabs provides solutions that enable utilities to make the transition to the smart grid and implement demand management technologies.

Other than Marlabs’ systems integration experience and software engineering expertise, Joseph W. Forbes, Jr., COO, Consert also referred to the fact that Marlabs, as an IBM Regional Systems Integrator, could help the company to effectively leverage IBM technologies was also a reason behind going ahead with the pact.

Jeff Holden, VP, Marlabs, said, “Based on real-time two-way response techniques, the system will create a virtual power plant, promote green renewable energy, and improve efficiency of the grid.”

Accenture to forge connection between utilities and city authorities

Accenture has taken an initiative to accelerate the introduction of smart grids by connecting utilities and city authorities that are committed to deploying the same.

Called The Accenture Intelligent City Network, the initiative connects utility executives and metropolitan leaders to exchange knowledge and practical experience related to planning, challenges and advantages of smart-grid technology.

The focus will be on creation of blueprints for the deployment of smart grids, including the integration of smart grids with broader investments in intelligent infrastructures, such as smart buildings and transportation, as well as new technologies and emerging standards.

Accenture believes that city authorities are in the best position to coordinate with the public- and private-sector stakeholders to transform the energy consumption habits of local communities.

Initial members of the Accenture Intelligent City Network include Xcel Energy, East China Grid Co., a Chinese transmission company; Russian Interregional Distribution Grid Company of Centre (MRSK of Centre), which will be creating an “intelligent” city in Belgorod in collaboration with the regional government; Dutch utility Alliander N.V. and the City of Amsterdam.

Mike Carlson, Xcel Energy’s vice president & chief information officer, said that energy management, customer service and environmental management strategies can all be enhanced with smart-grid technologies and through a partnership between utilities and city and state regulatory leaders.

Related links: Accenture, Utilities, Intelligent infrastructure, Xcel Energy, energy management

Intelligent agents to enhance open communication and self-healing

Interview with Dr. Maher Chebbo, VP Utilities EMEA, SAP

smartelectricnews.com Special

An emerging technology area facilitating the development of smart-grid infrastructure is the use of intelligent agents, which are increasingly being used to participate in electrical utilities' demand response programmes.

These devices combine components for sensing, computing, device control, and communication in order to optimise energy usage.

It is said that these intelligent agents interact with each other in a more localised fashion before they interact with the centralised utility grid. When agents in a group interact, they can analyse the predetermined reduction programmes for each customer and react accordingly. This autonomy provides greater efficiency and is more cost-effective than a purely centralised system.

Going forward, Dr. Maher Chebbo, Vice President Utilities for Europe ,Middle East and Africa (EMEA), SAP AG, who presented during Intelligent Demand Response for Electricity Summit 2009 held in Amsterdam recently, says the intelligent agents will include more ICT and Electronics and a result they will further help in open communication and self-healing processes.

A fundamental capability of a self-healing grid is its ability to prevent or contain major disturbances. The vision of a "self-healing" smart grid is feasible using a distributed infrastructure for monitoring and control.

Utilities now acknowledged that today's distribution grid is more than an interconnected system of generating units, power lines, substations and transformers that deliver electricity to customers. Smart Grid refers to a modern, intelligent electricity transmission and distribution system that incorporates traditional and advanced power engineering to enhance grid performance and support a wide array of functionality for customers and the economy.

And technologies that help save energy at households include:

· Time of use Pricing Information
· Dynamic Pricing signals
· Smart Thermostat
· Home Energy management Systems like devices.

"These technologies help peak demand reduction up to 40 percent plus in some cases," says Dr. Chebbo.

Two-way communication

For a utility to monitor the power used by its customers, then to transmit demand-response commands to a customer's automated energy management system, there must be a two-way communication.

The utility receives the usage information from the customer's meter, and can then send messages, via email or telephone, informing them of the need to reduce power. During demand response events, the utility can activate automatic controls to reduce air conditioning, lower lighting levels, or momentarily turn off appliances – usually with an override option by the consumer.

On the two-way communication process, Dr. Chebbo said utilities companies send tariffs and contract information + price signals to the consumers through Smart Meters and Internet.

"Consumers will change their options (if their contract allows) on the Smart meters and through the Internert Self Services (also SMS or mobile transactions could be used). Demand Response is one of the scnearios that are enabled by Smart Metering Infrastructure," said Dr. Chebbo.

One of the critical components of communication systems for demand response includes software, which is used to perform the various tasks required to run smart grid networks and demand-response applications.

"There are different kind of software required for the smart grids and demand response : the technical software like SCADA (they have to evolve to become smart grids compliance), the management software (like SAP ERP, Customer Information system, Asset Management, Smart Metering Application scenarios), the technical software for management the Smart metering Infrastructure (Meter Data Unification System) and they have to talk to each other in real time and interoperability is key," said Dr. Chebbo.

The industry has already witnessed the development of turnkey "energy intelligence" software to electric utilities for use in residential applications. These offerings include software, hardware, and "smart
meters" that help control energy load. For instance, hardware products include meters with Internet capabilities, which make it possible for clients to access their usage records on demand, and software offerings include programmes, which allows customers to monitor their meters, automate usage reduction, and receive alerts and grid demand status.

On procuring such solutions, Dr. Chebbo recommended: "The ones who should be providing a platform for smart grids and demand response should be system integrators with a good knowledge of the industry, rather than a single software vendor."

Reduction in energy usage via connectivity to a customer's house

smartelectricnews.com Special

Development of standards-based smart grid connectivity that offers easy home area networks (HAN) access to utilities deploying Advanced Metering Infrastructure (AMI) solutions continues to pave way for a "greener" environment.

AMI provides energy savings for consumers through management of devices and appliances in the home area network.

As a result, there is energy saving through improved demand management and lower energy costs to consumers.

The industry has already witnessed developments related to broadband smart meter HAN interface, coupled with ultra low-power chips that leverage the widely-deployed Wi-Fi infrastructure, enabling programmable, connected devices such as thermostats and smart appliances to optimise the control, delivery, and usage of power.

Home energy monitoring

The industry has been working on shaping up new software for home energy monitoring products, designed to provide consumers with a more detailed information on the energy they use.

Via such systems, customers are offered energy bills with a comprehensive information. It is hoped that providing customers with more details about the appliances and times of day that use the most energy will encourage them to think more about curbing energy use.

New manufacturing techniques can produce devices – including a microprocessor, a unique Internet address, a controller, and simple network communications – at a very low cost per control point, so these devices can be embedded into electrical appliances and lighting ballasts.

Sharing his viewpiont, Dr. Maher Chebbo, Vice President Utilities for Europe ,Middle East and Africa (EMEA), SAP AG , who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009, says Chips applicances have been produced by different labs like Northwest National Lab.

For instance, Pacific Northwest National Laboratory found that providing homeowners with smart appliances and information on how to save money cut their energy costs but also reduced overall power consumption during peak use periods.

"(Such initiatives) help in sending real-time information about the energy consumption of each electrical appliance at home and also to help self programming in terms of turn-on, turn-off when energy if more expensive and at peak times," said Dr. Chebbo.

As per the information available, appliances outfitted with computer chips are able to sense when the transmission system was stressed and partially turned themselves off to save critical kilowatts — potentially staving off catastrophe.

In terms of reach news of efficiency in communication, there are several new ways of looking at it. For instance, there are initiatives related to an existing software that allows consumers to see which appliances are most power hungry getting integrated into the data warehouse. If a customer's bill is high one month, instead of sending engineers to check the meter, the databases allow energy firms to know if the household has just added a new energy-intensive appliance. It would also allow utilities to notify customers if thier energy use is higher than usual, potentially heading off a particularly hefty bill. Conversely, the system would also be able to notify the energy company if the meter reading looked wrong, saving the customer and energy company time and money.

Commenting on selection of local devices and control systems online to create virtual control center without enterprise software, systems, or device-level integration, and how should they help in administering demand response (DR) programmes and manage energy consumption, Dr. Chebbo referred to integration of the virtual control center and enterprise software through an automated metering infrastructure.

"The smart meters should be the link between the HAN and the enterprise software. All the intelligence about the customers and their behaviour (in terms of consumption profiles) is in the enterprise software taking care of customer information system and assets management," said Dr. Chebbo.

Other than such software, going by the developments in the industry, it is clear that the focus is also coming up with in-home energy displays and smart meter solutions that enable utilities to put the end user in control.

And in terms of the exterior of such products, the onus is on companies to produce attractive products. And at the same time also add real value to this information by providing an intuitive web service that puts raw data into a usable context.

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

"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.

"Consumers must be motivated for DR"

smartelectricnews.com Special - Interview with Petri Trygg, Researcher, Institute of Power Engineering, Tampere University of Technology

Specialists recommend a thorough study or an insight into customers' requirements and behaviour before involving them for DR programmes right from the pilot/ test phase for any project.

Be it for what customers care about and what their "need drives" are (is it the environment-related or financial savings or social responsibility); a lot of introspection is required before one factors these into a communication and implementation strategy and starts reaching out to the customers. There are initiatives or rather new precedents taking place in a market like the US where the electric utility industry is testing the response of residential customers to different innovative pricing options under one programme to test an advanced metering technology. The consumer is checking out pricing options that could assist them in curbing their monthly bills by better controlling their power consumption.

Assessing such approaches, Petri Trygg, Researcher, Institute of Power Engineering, Tampere University of Technology, says, "I think it heavily depends on the issue [being] studied. In general, consumer´s attitude towards electricity must be quite uninterested [one]."

Trygg, who is also MD of PowerQ Oy, Finland, a company specialising in metering information analysis e.g. power quality monitoring and web-applications, pointed out that in Finland, price difference of electricity between different companies is few hundred Euros.

"In DR, potential of savings must be quite high to really boost usage of it in real life situations compared to simulations," said Trygg, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009.

Through pilot programmes, companies or utilities are looking 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.

But Trygg categorically says before all this consumers should be informed first about the test and recommends communicating with them on a regular basis. "Like in medicine development using placebos for comparison group. Then comparing the different situations. Alternative with different compensation levels," Trygg told smartelectricnews.com.

On how the government/ state authorities and other organisations can get an insight into how consumers react to pricing information or any initiative, Jessica Stromback of VaasaETT Global Energy Think Tank recently told smartelectricnews.com: "Well, 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."

It is also critical to remember that most consumers know almost nothing about the industry and they may not understand the ramifications of their answers. As Jessica says, 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 all over the world," says Jessica.

On the same, Trygg said, emphasis should be given to price difference for electricity versus amount of changes.

"Consumer must be motivated for DR. And for finding out the motivating compensation study of the electricity sales price differences versus the rate of consumer changing the sales company should be done locally in the markets DR is designed," said Trygg.

On inducing a change in consumers' usage habits, Trygg said the approach would depend upon the market.

"In Finland, the main factor is the compensation to the consumer. Also knowledge that high demand situations require more polluting energy production may influence some of the customers. So by reducing peak loads only polluting production is limited and renewable is kept going. Cheaper "green" tariffs are also key to success. Currently, they are more expensive and this is not motivating consumers."

With reference to a "smart meter" getting installed at each participant's residence (for a pilot study) to measure electricity use at hourly intervals and transmit usage data each day through a wireless communications network, Trygg says in any case AMR is the solution also for DR.

"But alternative and independent models also exist. In critical network situations, frequency based DR is also new possibility. Customer behaviour is dependent on price differences also. Also, predictability of prices in each hour is key in changing the load profiles," said Trygg.

Intelligent Demand Response for Electricity Summit 2009

Petri Trygg, Researcher, Institute of Power Engineering, Tampere University of Technology 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
==

"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

"Supply companies will need to learn about DR possibilities and efficiencies"

Interview with Alastair Manson, senior consultant, Engage Consulting Limited

smartelectricnews.com Special

The decision to go for a demand response programme in case of businesses depends upon a number of factors. For such initiatives, organisations have to diligently plan, implement, and monitor activities, which best fits in with the kind of business they are in, scale of their operations and other factors.

While for smaller retailers there might be not be a lot of electric load they can shift to off peak times, for relatively larger businesses the issues tend to be much more complex considering decisions related to production schedules, selection of equipment and much more.

Still, the general consensus seems to be that the understanding of such process, which is all about reducing load when contingencies occur that threaten supply-demand balance or market conditions occur that raise supply costs, is only gradually picking up.

"You would have to say that there is a lot to be learnt. There is much that is understood about demand response but more that is not known. Similarly, the generation profile will change in ways that are unknown," says Alastair Manson, senior consultant, Engage Consulting Limited.

Manson, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009, says smart meters do not in themselves deliver demand response but can offer a number of ways that can provide or facilitate various levels of demand response: They can be linked to displays (giving consumption and pricing information including potentially CPP); They can have load limiting capability – in line or auxiliary switches that could control all or part of supply; They can be linked to other devices in the home directly or via an energy control device to allow automated management of devices usage and so on.

"It is probably fair to say that suppliers are investigating various levels of load control and with various levels of sophistication but that our initial challenge in Great Britain is to get the implementation of smart metering underway with the right functionality to allow for options to be decided into the future," Manson told smartelectricnews.com.

DR programmes are like other programmes but there is a particular need to learn along they way and to take in innovation, says Manson.

According to Manson, supply companies will need to learn about DR possibilities and efficiencies.

"There is a constant learning process and they need to keep learning what is effective with customers and what customer's abilities to change usage are. They need to understand what the rules are and have an understanding of what the rules will be and keep learning what technologies can provide," he added.

Automated DR systems have been deployed for critical peak pricing and demand bidding and are being designed for real time pricing.

On how does automating DR allows greater levels of participation and improved reliability and repeatability of the demand response and customer facilities, Manson said automation will suit many customers who will not want to manually micro-manage their consumption.

"It is a service that has to be seen as acceptable to customers rather than being inflicted on them. There needs to be an education process from suppliers and beyond including government. There needs to be an energy service to customers not just an energy supply service. Customers need to appreciate benefits of DR -this will take learning and time and they will need alternatives that make DR acceptable and a benefit rather than just reducing their demand," said Manson.

While the lack of knowledge about how to develop and implement DR control strategies is a barrier to participation in DR programs like CPP, another barrier is the lack of automation of DR systems.

At least one way that DR can be facilitated is via smart metering with sufficient abilities.

"But DR cannot be implemented by stealth," said Manson.


In terms of opting between Manual DR programme, and Semi-Automated DR, which involves a pre-programmed demand response strategy initiated by a person via centralised control system, and Fully-Automated Demand Response, which does not involve human intervention, but is initiated at a home, building, or facility through receipt of an external communications signal, Manson said this has to be done by study of what works and what is acceptable to and desired by customers, bearing in mind that conditions may well be very different not so far in the future.

Recently, it was indicated that less than one percent of all commercial and industrial companies use advanced technology to measure and manage energy spend, whereas nearly 100 percent use advanced technology to measure and manage telecommunications spend in the US.

Assessing the situation as far as the maturity level of Advanced Metering in Total Energy Management in the UK is concerned, Manson said, "I would be surprised if it is really one percent. I would have to say that UK is in its infancy but will grow quickly."

Intelligent Demand Response for Electricity Summit 2009

Alastair Manson, senior consultant, Engage Consulting Limited 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

“The whole future of energy is linked”

Article: Interview with Capgemini’s Doug Houseman

smartelectricnews.com special

There is a call for greater integration of demand response and energy efficiency to ensure that investments in energy systems, technologies, and practices are integrated and optimised.

Experts acknowledge that energy efficiency and demand response, demand side management, distributed energy resources, plug in electric hybrid vehicles etc. all have to fit together into a single picture for each country or service territory.

“The whole future of energy is linked,” says Capgemini’s Doug Houseman.

“You can not pull one thread out of the tapestry and still have a complete picture,” Houseman told smartelectricnews.com.

According to Houseman, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January this year, it is important to realise that the regulators play the biggest role in determining the future.

“They will frame the picture, providing incentives to one set of answers, ignoring others, and penalising another set. In many cases, the penalties will not be intentional, but they will exist. There is no way to design a programme that does not impact some items in a negative way, so regulators have to carefully choose what they want to do and run market simulations to see what the knock on effects are of their policy.”

Citing an example, he said, “Germany did not mean to make solar more expensive globally and reduce the overall availability of the solar power in the rest of the world. Their aggressive incentives for solar photovoltaic did just that. Even though the manufacturing costs for solar are down by more than 10 percent, the global demand for solar - the main growth is from Germany - has driven prices up on the wholesale level by more than 15 percent. This will in the long run result in more factories to handle the demand, but in the meantime, a country with one of the lowest production potentials (based on hours of available light bright enough to produce power) has cornered the market on photovoltaic cells. If Germany had not put the incentives in place, solar would not have been a viable option for most business and home owners.”

Further from the regulatory standpoint, Houseman shared his viewpoint regarding how demand response can be used effectively to manage energy use year-round, managing residential programmes and much more. Excerpts from an interview:

smartelectricnews.com: It is said that technologies that can enable demand response also can be used effectively to manage energy use year-round. How do you assess the situation?

Doug Houseman: It is true that once you have communications with your customer and/or their equipment, it is easy to use that communications all year round. In home displays, home area networks and direct load control equipment can all be used for more than the 200 hours or so that the market really needs demand reduction during peak times…it would be a shame to put in equipment and then let it sit idle more than 8,500 hours a year.

smartelectricnews.com: Can you cite example of financial benefits resulting from optimal execution of such programmes?

Doug Houseman: The best example is at Florida Power and Light – it is also one of the oldest programmes having been in existence for almost 30 years now. By 2006, as per the last time numbers were published, the programme had cost FPL about $1.1 billion dollars and saved FPL more than $8 billion dollars. The regulatory requirement is that ½ of the cost savings be given directly back to all customers – not just the ones that are part of the programme. The rest of the savings can be used to fund the programme and to make profits for FPL. There are several others that can be discussed, but this in the largest, best documented and the oldest programme in the world.

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?

Doug Houseman: It is not a simple one size fits all (situation)– residential programmes can be done along the lines of one size fits all, but commercial and industrial programmes can not. If I stick to the residential programme, there are some clear winners from regulatory rules standpoint that help with the overall programme size, pace and effectiveness:

• Allow utilities to earn their usual rate of return on the equipment (or more if you want the programme to go faster).
• Allow companies to depreciate the equipment coming out at the same pace as they would have and continue to earn the normal rate of return on the value on the books of the old equipment.
• Reduce the amount of data that has to be retained to only the amount that is really required to deal with bad bills. Most regulators require that all information be kept for several years, if you want to keep the programme costs down, determine what will make a difference for the ratepayer and the commission and allow the utility to decide what they want to keep beyond that. In a single day, a single meter will send in more than 10 times the data that a meter generates in a year with the current meters.
• Agree to a simple VEE method – most methods that are on the books today are intended for very large customers, where the difference of 2 or 3 percent can mean thousands of dollars in added costs to the business. In the home owner’s world, having 2 to 3 percent of the power in the wrong interval would normally be less than $2. Over time, the mistakes tend to even out on the smaller customers (e.g. a kilowatt hour is placed in the peak bucket one month because reading is missing, and then if it happened again the next kilowatt hour would be allocated to off peak evening up the charges).
• Allow consumers to buy most of what they want to put in their home at the local hardware or DIY center. Different customers will want different levels of knowledge and control. Make sure you provide the customers with the right information so they can buy equipment that will run with the equipment from the utility.
• Never stop monitoring the programme for equipment failures, maintenance deferral or bad consumer level devices.

If you do these six things, then the determination on how to handle the installation, maintenance and data management can be managed for a reasonable cost and customers can have choices about what they want.

smartelectricnews.com: When it comes to components of such programmes being subsidised / regulated, what role according to you national, local governments and the European Union can play in the time to come?

Doug Houseman: They will have to lead, there is no way in a regulated (or semi-regulated) market that anyone can take a substantial decision without a nod from each of the regulators they have to deal with. In the UK, there is a potential for more than a dozen regulators to get involved in these programmes.


Intelligent Demand Response for Electricity Summit 2009

Capgemini’s Doug Houseman is scheduled to speak during ‘DR Cost Benefit Analysis: Assess the cost to install, operate and maintain your DR & DSM programme’ of 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

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

Ensuring a fit between a business and its chosen demand response programme

Article: Interview with Capgemini’s Doug Houseman

smartelectricnews.com Special

Businesses are increasingly embracing demand response (DR) and load management programmes that not only curtail energy use during the times of peak demand but also result in energy efficiency gains. Considering several benefits such as strategic conservation, time-based rates, peak load reduction, as well as management of energy bills, the adoption of demand response is showing signs of gaining momentum.

For such initiatives, organisations have to diligently plan, implement, and monitor activities, which best fits in with the kind of business of they are in, scale of their operations and other factors.

Providing an insight into how companies should approach and keep a vigil on initiatives related to DR, Capgemini’s Doug Houseman told smartelectricnews.com that all this depends on the characteristics of the company.

Citing an example, Houseman says small retailers probably do not have a lot of electric load they can shift to off peak times, so they need to have lights and heating or cooling during store hours.

“Any programme that causes them to have to cut their usage will mean one of three things - that they have to install more efficient equipment or they will have to curtail their load and impact lighting or temperature in the store or they will have to close during curtailments to deal with the curtailment. Programmes that shift the price of power and do not demand a curtailment may mean that the cost of doing business just went up or that the store hours will have to change,” explained Houseman, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2008, to be held in Amsterdam on 24-25 November this year.

According to Houseman, for larger businesses the issues are more complex. They need to think about production schedules (such as do I run a night shift instead of a day shift in the summer?) and what equipment they can replace. Should a curtailment programme be the choice for DR, then the question is do they install their own generation to deal with it, and if so how do they deal with the carbon issues?

“Since they mostly are not dependent on customer traffic during the daytime – but rather do things that are out of the direct line of sight of the customers, they have more options, but they also, in many cases, have even smaller margins between profit and loss. Doing the wrong things, can end up with the business having to shift production off shore to a country that has better energy pricing or a more friendly energy policy to large companies,” said Houseman.

In all cases, businesses need to participate in the process of deciding the rules, and how they want to be impacted.

“The future is not that there will be no impact. Rather, the future is that there will be an impact and the question is what will that impact be? What do they want it to be? What will hurt the least?” shared Houseman.

Before planning and executing such initiatives, ones needs to take into consideration that these programmes can also result in other benefits such as deferring the need to build new infrastructure and mitigating the level and volatility of wholesale energy markets. Specialists feel in case of a pilot programme, one should evaluate equipment, acceptance, and improved energy efficiency and the contribution to reducing GHG emissions.

For his part, Houseman acknowledged the fact that without knowing what the rules and incentives will be, it is difficult to decide as a business to make change to hours, equipment, staffing, locations, etc.

Referring to partnering with specialists, Houseman said it should be around determining which kinds of programmes have the smallest negative impact on the business and then working to get them implemented.

“For a small machine shop, high efficiency motors, better air compressors, and rethinking ventilation in many cases can exceed the demand for reduction, and the nice thing is that the changes are in use every hour the shop is open, helping to create long-term savings. But on the margins that most small machine shops operate on, they can not afford the capital costs of doing this. So a programme that would either offer very low cost loans, or would provide rebates for such installations is an important step to opening up the market and as the market grows the cost of this kind of equipment will drop, making it more affordable to others,” he said.

Houseman added that installing equipment monitoring and building control systems helps a lot.

“At the Dutch Tax Authority, installing building monitoring equipment, light switches that turn themselves off and training the staff has resulted in a 19 percent reduction in overall energy consumption. This programme was originally expected to add cost to the agency, but now looks like it may pay back in as little as four years, if the staff sustains their part in the programme,” he pointed out.

If the first step is getting the policy right, then the second is partnering to determine what steps to take.

Houseman says the matrix of options is more than 200 items long and some are simple and quick and others are long and complex. Some of the long and complex ones have faster returns on investment than the simple and quick ones (e.g. the payback for shutting down the factory on a critical peak pricing day – can be either the same day or never, depending on how much electricity you use and the price of the electricity as a component of your outputs).

Getting the right mix of options figured out for each business will be specific to the business, their required operating hours, margins, percentage of their business cost that is energy related and how the energy is consumed.

“Once the right steps are figured out, it is important to look at monetising the energy consumption – can an energy broker or trading firm add to the overall value of the changes you are about to make,” he said.

According to Houseman, it is critical to look at this aspect with an open mind, sometimes things that on the surface seem like a good idea, don’t pan out when the overall market economics are factored in, in other cases – things that look hopeless can have a very positive impact on the bottom line. Once the monetising is complete, then and only then should you undertake to make the equipment, business hour or other changes to your business.

“Finally, the focus should be on getting enough information to plan ahead. In many cases, the electric providers have a day or two’s notice on when it is likely the prices will be higher in a time of use or critical peak pricing market. In a curtailment market, they also have a reasonable chance of determining the curtailments a day or two ahead, in most cases (the failure of a power plant or two in very hot or cold weather can result in a wild swing in market price with very little notice). Getting help through this whole process from people, who make energy their business, will make a big difference in the success of the project,” he said.

Specifically, referring to selection of a partner, Houseman following factors should be taken into consideration:

· Understanding of the local and national regulatory policies and the status of any changes;
· A clear understanding of your business – how you make money and where you use electricity or other energy;
· A clear understanding of the options your business has, if they have fewer than 40 or 50 options for you in their kit bag, you will not maximise your investment;
· An energy broker or trader they work with – and references from that firm;
· A pragmatic approach to improving your situation – in one furniture shop it may be fine to turn off all the power at 5PM and in another in may mean that fumes build up from the finishing process and may cause a nasty explosion. Any partner firm will have to have enough knowledge to walk your business and see what can be done;
· Be product agnostic. If they are pushing a specific product, you will find that is your answer, no matter what your question is.


Intelligent Demand Response for Electricity Summit 2008

Capgemini’s Doug Houseman is scheduled to speak during ‘DR Cost Benefit Analysis: Assess the cost to install, operate and maintain your DR & DSM programme’ of Intelligent Demand Response for Electricity Summit 2008, to be held in Amsterdam on 24-25 November.

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

Or

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