Post # 63 - Two New Reports Highlight the Benefits (and Costs) of Smart Grid Development

The past week saw the release of two major studies that emphasize both the benefits of fully implemented smart grid technologies and the costs of implementation.

First, and from an international perspective, a new report from the International Energy Agency (IEA), an autonomous organization of 28 member countries (including the U.S.) created to pursue reliable, affordable and clean energy initiatives, says that widespread smart grid deployment can play a significant role in enabling nearly all clean energy technologies, including renewables, electric vehicles and energy efficiency.

The IEA report, Smart Grids Technology Roadmap, provides a consensus view from more than 200 government, industry, academia and consumer representatives on the current status of smart grid technologies, and charts a course for expanding their use from today to 2050. As well as addressing current concerns with existing electricity systems, such as ageing infrastructure and increasing peak demand, the IEA report highlights smart grid technologies as important elements for expanding the use of a number of low-carbon technologies, such as electric vehicles. The report also outlines the potential for smart grids in rural areas of developing countries further down the line. Small "remote‟ systems - not connected to a centralized electricity infrastructure and initially employed as a cost-effected approach to rural electrification - could later be connected easily to a national or regional infrastructure. Further, smart grids could be used to get electricity to sparsely populated areas by enabling a transition from simple, "one-off" approaches to electrification (e.g. battery-based household electrification) to community grids that can then connect to national and regional grids.

IEA recommends greater international collaboration in sharing experiences of pilot programmes and in leveraging national investments in the development of required technology. It also stresses a need to develop common standards between countries that will help optimise and accelerate both the development and deployment of necessary technology while at the same time, reduce costs for all stakeholders - governments, industry, and the public.

But, as a second (and pro-smart grid report) indicates, there is a price tag. The Electric Power Research Institute (EPRI), an independent, non-profit company that conducts research and development relating to the generation, delivery and use of electricity, has just released a broad assessment of the costs and benefits to modernize the U.S. electricity system and deploy smart grid technologies.

The EPRI assessment, Estimating the Costs and Benefits of the Smart Grid, factors a wide range of new technologies, applications and consumer benefits the investment needed to implement a fully functional smart grid ranges from $338 billion to $476 billion and can result in benefits between $1.3 trillion and $2 trillion.

EPRI's estimate reflects new technologies related to the grid, information, and communication technologies; market structures; demands of an increasingly digital society; more widespread deployment of renewable power production and its integration into the grid; expansion and maintenance of existing infrastructure; and technologies and systems to address grid security. The report balances costs with benefits, which include: (1) more reliable power delivery and quality, with fewer and briefer outages; (2) enhanced cyber security and safety with a grid that monitors itself and detects and responds to security and safety situations; (3) a more efficient grid, with reduced energy losses and a greater capacity to manage peak demand, lessening the need for new generation; (4) environmental and conservation benefits, better support for renewable energy and electric-drive vehicles; and (5) potentially lower costs for customers through greater pricing choices and access to energy information.

The analysis updates EPRI's 2004 EPRI assessment, which estimated the cost of implementing a smart grid at $165 billion. The updated analysis assumes steady deployment of smart grid technologies beginning in 2010 and continuing through 2030.

Post # 62 - Consumers Still Sketchy on What the Smart Grid Is.

A new survey says most consumers who are aware of smart grid technology only somewhat understand it and what it does.

The survey, prepared by the NAHB Research Center for appliance giant Whirlpool Corporation and Habitat for Humanity International as part of their joint global housing initiative, says that 70% of consumers who know about the technology are pretty shaky on the details. In addition, only 43 percent of all consumer respondents indicated they know what Smart Grid technology is, although the number was greater for respondents in the upper middle (63%) and high-income (57%) segments.

The survey reported opinions from consumers and builders on topics related to green home building. The consumer portion of the survey also showed that of all Smart Grid-aware respondents, only 35 percent believe their community somewhat understands Smart Grid technology. A total of 46 percent of the same segment said they feel their community does not understand the technology at all.

The builder portion of the survey showed a similar perception of consumer knowledge on the subject. Of all Smart Grid-aware respondents, 62 percent said that they believe homeowners do not understand Smart Grid technology at all. Smart Grid-aware builder respondents generally felt more confident with their own knowledge of the technology, with 79 percent answering that they at least somewhat understand how it works. A total of 51 percent of Smart Grid-aware builder respondents noted that they believe the home building industry as a whole understands how the technology works.

On the plus side, at least from Whirlpool’s point of view, 48 percent of Smart Grid-aware respondents to the consumer portion of the survey indicated that Smart Grid-compatible appliances will be very important to green homes. In the builder survey, 64 percent of Smart Grid-aware respondents said these appliances will be at least somewhat important to green homes in the future.

Post # 61 - PG&E Files Smart Meter "Opt-Out" Proposal

In response to consumer concerns about health risks from exposure to radio frequencies and radiation from wireless smart meter devices – and under heavy pressure from California regulators, see here and here – Pacific Gas & Electric Company last Thursday submitted a smart meter “opt-out” proposal to the California Public Utilities Commission. The PG&E proposal would allow the utility’s gas and electric customers to have the device's communications system turned off – but it will cost them more money for their power.

Under PG&E’s plan, which still needs CPUC approval prior to implementation, the utility is proposing upfront and monthly charges to offset the cost of disabling the meters, employing meter readers and changing its information technology system. The utility would charge customers a $270 upfront fee, plus a $14 monthly charge or an increase in gas and electric rates, or a $135 upfront charge and a $20 monthly fee or increase in rates. The fees would be discounted for low-income customers who qualify for PG&E's CARE program.

In a prepared statement, Greg Kiraly, PG&E’s Vice President for smart meter operations, said:

We believe this proposal addresses concerns some customers have about [smart meters] while still delivering the many benefits of [smart meter] technology to the majority of customers. The overwhelming weight of scientific evidence assures us that the low-level Radio Frequency signals from our [smart meters] are safe – in fact, even safer than many household products, including cell phones and microwave ovens. But we know some customers nevertheless have concerns about the meters and we take those concerns seriously.

But many PG&E customers remain convinced that smart meters are hazardous to their health. They are not likely to be happy with covering any PG&E smart meter costs – particularly (and ironically) “opting out” costs.

In any event, PG&E remains at ground zero in the smart grid wars.

Post # 60 - Some Validation for D.C. Pilot Program

The National Action Plan Coalition (NAPC), a coalition of non-profit organizations in the utility, smart grid, regulatory, energy efficiency, environmental, and consumer advocacy areas, has issued a case study examining the PowerCentsDC pilot program in the District of Columbia. As I’ve previously posted, PowerCentsDC involves smart meters and a number of different demand response options.

The NAPC was formed to formed to implement the National Action Plan on Demand Response issued last year by the Federal Energy Regulatory Commission and the U.S. Department of Energy. The new NAPC report, PowerCentsDC: A Model for Stakeholder Collaboration, states that the DC pilot was unique because “various stakeholders—including consumer advocates, regulators and the local utility—joined together from the beginning to design, plan and implement it. Early education and involvement of stakeholders has become a high-priority issue in the [Demand Response] and Smart Grid sector according to most experts in the field.”

NAPC also states that the case study represents an alternate way to interpret specific a demand response or smart grid activity after it has taken place. Instead of focusing on the quantified results, the NAPC focused a narrative version of how the effort went from start to finish. In addition, the case study enables readers to identify best practices.

Post # 59 - Austin (Smart Grid) City Limits

The Pecan Street Project, a smart grid and clean energy research and development organization headquartered at the University of Texas at Austin, last month completed systems installation and has gone live with the first phase of its smart grid demonstration project in Austin’s Mueller community. The project seeks to expand and develop smart grid system's in the Texas capital though a customer-oriented approach that often has been missing in utility smart grid roll outs.

Pecan Street's board includes representatives from UT Austin, Austin Energy (the local utility, which already deployed 400,000 smart meters), the Environmental Defense Fund, the Austin Technology Incubator, the City of Austin and the Greater Austin Chamber of Commerce. The new project itself has been deployed by Incenergy LLC, Austin-based Smart Grid software company.

Pecan Street's new home smart grid systems, which capture minute-to-minute energy usage for the whole home and six major appliances or systems, are deployed in 100 homes at Mueller, all of which are green built and 11 of which have rooftop solar PV systems (photovoltaics (PV) is a method of generating electrical power by converting solar radiation into direct current electricity).

This spring, Pecan Street Project will deploy Incenergy systems in a second group of 100 homes outside Mueller that are at least 10 years old. All participants in both groups are volunteers. The project achieved an installed cost per home of $341 ($241 for equipment plus $100 for installation).

During the 12-month first phase, project researchers will learn about how homeowners use electricity, gas and specific appliances during the course of the day. This will mark only the second publicly-reported research on the daily energy profiles of Sunbelt homes (the other is a 1999 University of Central Florida study) and the first to incorporate data on output from rooftop solar panels and on the homes’ energy efficiency attributes.

In Pecan Street's announcement for the the rollout, executive director Brewster McCracken noted:

The customer will have final say about whether the smart grid is a smart idea. The truth is that we – those working on and advocating for the smart grid – need to learn a lot more from customers than they need to learn from us. Before anyone starts prescribing solutions, we must develop a much better understanding of what customers value and how they’re using energy now.

Together with selected companies, project researchers will use the information gathered from these homes to structure next generation home smart grid systems. These systems, which selected companies will deploy in the project’s second phase (beginning March 2012), will provide customers with the ability to manage – even over mobile phones – individual appliances and systems as well as electric vehicle charging and rooftop PV systems.

The installation and testing of these next generation technologies will take place in a larger group of up to 1,000 residential and 75 commercial customers. As with the first phase, all participants will be volunteers. Pecan Street Project will issue a Request for Information on February 15, 2011 for companies to deploy home energy management systems and to supply electric vehicles, in-home charging and rooftop PV systems.

This looks like a promising project. And it can provide a real test of utilities' ability to integrate consumer preferences into the smart grid.

Post # 58 - Xcel's SmartGridCity: Boulder, We Have a [Written] Decision

Following up on my prior posts (see here and here), the Colorado Public Utilities Commission finally released its written decision reducing $14.8 million in cost recovery from Xcel Energy SmartGridCity project in Boulder. The CPUC took this action despite a prior settlement, approved by a CPUC administrative law judge, that would have provide for cost recovery of $44.5 million.

Early last month, at its regularly monthly meeting, the CPUC voted to drastically reduce the cost recovery approved by its judge -- but t has taken a while for the agency to issue a written decision.

The written decision finally appeared about one month later. The CPUC criticized Xcel for failing to "articulate and defend a strategic plan for the use of SmartGridCity investment." The CPUC also expressed concern of whether the projected benefits would be actualized.

However, the CPUC will allow Xcel to recover $14.8 million upon demonstrating “the credible promise of consumer and utility benefits” and “the ability of customers to make practical use of [SmartGridCity] on their side of the meter through in-home devices.” But the CPUC wants to see a "robust" plan created with input from "academics, researchers, and customers."

Once again, a utility learns that customer buy-in for smart grid project -- especially smart meter projects -- is esential.

Post # 57 - Is Smart Grid Development Hindered by a Energy "Literacy Gap" Among Consumers?

The Smart Grid Consumer Collaborative (SGCC), a non-profit organization consisting of consumer and environmental advocates, technology vendors, research scientists, and electric utilities interested in promoting Smart Grid develpoment, recently released its "2011 State of the Consumer Report."

Building on a series of SGCC-sponsored focus groups last fall, the report examines consumers’ attitudes toward their electrical needs and smart grid initiatives. Among the major findings:

• There exists an energy "knowledge gap" in the United Staets, with few "energy literate" consumers. The report finds that "only a small percentage of consumers have knowledge or awareness of how power is generated and distributed." Moreover, among those who have heard of Smart Grid, "few have an accurate understanding of its meaning or the implications of failing to modernize the grid."
• At the same time, concern over climate change, energy security, and global competitiveness have made more consumers receptive to learning about energy. But consumer interest "is centered on relationships, financial arrangements, and usage, rather than deep technical understanding of electricity and the delivery system."
• Personal values and priorities more accurately define consumer segments than factors such as age or income -- suggesting that consumer motivations are more predictive of a willingness to adopt smart energy practices than traditional demographics.
• Multiple pilots show that the combination of price signals and feedback devices results in significant behavior shifts. For maximum impact, options and interfaces must evolve to meet the needs of less technically-oriented consumers.

Not surprisingly for a stakeholder organization committed to promoting consumer acceptance of the the Smart Grid concept, the SGCC report focuses on consumer education and outreach -- and outreach focused on realistic view of consumer attitudes.

In other words, "requests to change or modify [consumer] behavior must come from [consumer] perspectives." Consumers’ varied views of the benefits of Smart Grid "do not always align with utilities, technology vendors, or the formal positions of consumer advocates." Thus, SCGG calls for more research to clarify where the similarities and differences exist. And utilities will need a portfolio of programs and pricing options to meet the needs and priorities of their customers:

"While some will be motivated by comparisons with the neighbors, others will find those reports unfair. Price nudges matched with the right technology will be the compelling motivators for still others. Simple choices, that are not overwhelming, will allow consumers to pick what works for their families."

The study finds that consumers do see value in operational benefits and increased reliability, but utilities have not always focused on explaining thiese benefits from the public’s perspective. Thus, when consumers are asked to pay for grid enhancements, they (not unreasonably) "expect visibility as to how they would share in or benefit from significant operational savings." The report concludes that, while attempting to quantify consumer attitudes is valuable, "it is always good practice to speak directly with consumers whenever possible."

That last point may seem both obvious and a truism. But as readers of this blog will attest, the failure of utilities to communicate with their customers -- more than any "literacy gap" -- probably is the key explanation for widespread resistance to the Smart Grid concept among utitility customers. The SGCC report clearly is a reflection of -- and an attempt to respond to -- that reality.