Saturday, June 18, 2011

Post # 73 - New White House Report Identifies "Key Actions" to Empower Consumers in a Smart Grid World

The National Science and Technology Council, a cabinet-level council within the White House tasked with coordinating science and technology policy across the federal government, last week released a new series of smart grid recommendations.

The report, A Policy Framework for the 21st Century Grid: Enabling Our Secure Energy Future, outlines what the NSTC calls “four essential pillars that will enable the United States to transition to a smarter grid”:

1. Enable Cost-Effective Smart Grid Investments: Smart grid technology can drive improvements in system efficiency, resiliency, and reliability, and help enable a clean energy economy through cost-effective grid investments Many of these technologies promise to pay for them- selves in operational improvements, and energy savings The Federal Government’s research, development and demonstration projects, technical assistance, information sharing on technologies and programs, and evaluations provide valuable guidance for utilities, consumers, and regulators about what approaches are the most cost-effective, thereby paving the way for the effective, ongoing upgrade of the grid

2. Unlock the Potential of Innovation in the Electricity Sector: A modernized electric grid promises to be a powerful platform for new products and services that improve grid operations and deliver comfort, convenience, and savings to energy customers

3. Empower Consumers and Enable Informed Decision Making: The success of smart grid technologies and applications depends on engaging and empowering both residential and small business consumers New tools and programs promise to provide consumers personalized information and equip them to make informed energy choices, while ensuring their energy consumption data is accorded privacy protections

4. Secure the Grid: Protecting the electric system from cyber attacks and ensuring it can recover when attacked is vital to national security and prosperity Developing and maintaining threat awareness and rigorous cybersecurity guidelines and standards are keys to a more secure grid.

With respect to no. 3, empowering consumers, the NSTC report identifies a number of “key actions.” The report says that state and federal policymakers and regulators should evaluate the best means of ensuring that consumers receive meaningful information and education about smart grid technologies and options. “Ideally, these efforts will create a track record of transparency and responsiveness, address consumer concerns including data privacy, and clearly explain the opportunities and safeguards that characterize smart grid projects to help consumers make informed decisions.” State policymakers also should continue to consider how to develop policies and strategies “to ensure that consumers receive timely access to, and have control over, machine-readable information about their energy consumption in a standard format.”

Where a utility deploys the relevant infrastructure, the report says that state and federal regulators should consider means of ensuring that “consumer facing devices and applications make it easier for users to manage their energy consumption.” The NSTC notes that types of information and options that smart grid technologies can offer may not be familiar to all consumers, meaning that a simple and usable design may well be crucial to helping consumers realize the promised benefits.

The NSTC states that state and federal regulators should consider, as a starting point, methods to ensure that consumers’ detailed energy usage data are protected and develop, as appropriate, approaches to address particular issues unique to energy usage. The report argues that “consumer trust is essential to the success of smart grid technologies, and protecting the privacy of smart grid related data is one crucial component of strengthening this trust.”

Finally, the NSTC recommends that state and federal policymakers and regulators should consider appropriately updating and enhancing consumer protections for smart grid technologies. “Concerns about data-sharing, new rate structures, and involuntary remote disconnection—namely the impact on privacy, fairness, due process, and costs—raise policy challenges that consumer protection laws and policies may need to address.”

The report itself, of course, does not establish any policy, even for the federal government – and many of its prescriptions in the consumer area are in the regulatory domain of the states and their public service commissions. But it does reflect the thinking within the current administration and follows up on prior Obama administration initiatives designed to promote smart grid development.

Saturday, June 11, 2011

Post # 72 - EDF's Smart Grid Framework

Last June, the California Public Utilities Commission (CPUC) issued an order outlining the requirements for "Smart Grid Deployment Plans" to be filed by July 1, 2011 by California’s three investor‐owned utilities: Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.

The CPUC directed that, in preparing their Smart Grid Deployment Plans, the utilities follow a common outline, addressing eight specific topics:
1. Smart Grid Vision Statement;
2. Deployment Baseline;
3. Smart Grid Strategy;
4. Grid Security and Cyber Security Strategy;
5. Smart Grid Roadmap;
6. Cost Estimates;
7. Benefits Estimates; and
8. Metrics

In anticipation of the submissions, the Environmental Defense Fund (EDF), which has played an active role in CPUC smart grid proceedings, last week issued its Evaluation Framework for Smart Grid Deployment Plans, intended (in the words of the EDF's release) "to critically evaluate how effective California public utilities' plans to upgrade the state's outdated electricity network into a digital smart grid will be at delivering environmental and consumer benefits."

EDF recognizes that as PG&E, SDG&E and SoCalEdison develop plans to deploy the smart grid in their service territories, "site‐specific circumstances and considerations must be taken into account." For that reason, EDF states that its evaluation framework does not require that every utility plan engage in every listed strategy or pursue every identified metric. "To a large extent," the documents states, "deployment strategies must flow from individualized smart grid visions that are calibrated to respond to both existing and future conditions." But, with that caveat, the EDF proposes the following evaluation framework, based on five principles:

1. Smart grid deployments should seek to share costs between utilities and consumers, and deliver benefits to consumers commensurate with investments. Smart grid deployment plans should share the investment and technology risk between utilities and their customers, while making sure customers get the full value from the investment, including reduced whole‐system costs and improved reliability, environment quality and public health.

2. The smart grid should empower customers to make choices about their energy use, both to save money and to support clean energy. In general, consumer empowerment is achieved through providing customers with the information, tools and incentives needed to effectively manage on‐site energy production, storage and use. At the same time, consumer empowerment is also supported through maintaining or improving customer equity, protecting consumers from unnecessary financial risks and loss of electrical service, and protecting against loss of privacy.

3. The smart grid should create a platform for a wide range of innovative energy technologies and management services. This platform should enable new technologies and markets without compromising information security.

4. The smart grid should enable and support the sale of demand‐side resources into wholesale energy markets, on equal footing with traditional generation resources. Such demand‐side resources should include energy efficiency, demand response, distributed generation, and storage.

5. The smart grid should deliver environmental and public health benefits. Smart grid cost‐benefit analyses should take into consideration the full range of benefits of deployment, including reduced use of high‐polluting peak power plants and reduced air, water, land and wildlife impacts, for example by avoiding the construction of power plants and transmission lines.

EDF states that it will use the framework to score how well the public utilities' plans will enable the integration of clean energy technologies, empower customers, create a platform for innovative technologies and services, enable demand-side resources to be made available for wholesale energy markets and meet environmental targets set forth in federal and state laws.

Tuesday, June 7, 2011

Post # 71 -- UK Smart Meter Pilot Shows Promising Reductions in Consumer Energy Consumption

General Electric last announced the results of a three month test of smart meters in the English village of North Leigh, stating that the meters allowed the community to reduce its energy consumption by 10% over three months.

The United Kingdom has committed to the European Union’s goal of reducing primary energy consumption of primary by 20% by 2020—the EU's so-called 20/20/20 initiative. Part of the effort to to provide the UK government and British utilities with information to gauge effective methods of influencing consumer behavior to reduce energy usage, the "Challenge North Leigh!” pilot was part of the government-sponsored Energy Demand Research Project (EDRP), a suite of large scale trials across Great Britain. It seeks to better understand how consumers react to improved information about their energy consumption over the long term.

The EDRP is testing a range of methods of providing customers with improved feedback on their energy consumption, including:

-smart electricity and gas meters;

-real-time display devices, which show energy use in pounds and pence;

-more accurate and more frequent bills;

-energy efficiency information; and

-community engagement.

For “Challenge North Leigh!,” Scottish and Southern Energy (SSE)—a Scottish-based utility providing electric service both north and south of the England/Scotland border—provided GE smart meters to the 800-home Oxfordshire community, making the 2,000 villagers some of the first in the United Kingdom to have smart meters installed in their homes. The smart meters gathered data in real-time and communicated that information back to the energy supplier. SSE was then able to present gas and electricity usage information to individual customers. This information was made available to individuals on a website, allowing them to view their energy usage and enabling them to make informed choices to reduce their electricity demand—again, according to G.E., by about 10% over three months.

The full project results have not yet been posted, but “Challenge North Leigh!” points to the potentially positive role smart meters can play in consumers' energy conservation practices.