Jameson Nunney, Director of Research &Innovation, IGS
Consumer data access allows companies to better predict the future, which inherently reduces risk & costs. And that’s really driving the future in every industry.
First, access to Historical Data has helped companies and their customers avoid costs by creating more predictability and yielding less waste. And, this data has also been used and paired with consumer incentives to better drive future outcomes.
Next, companies have pushed for Real-time Datato gain more accurate signals for forecasting future events.
Once historical & real-time consumer data flow is achieved, the only logical next step is for companies to Control Consumer Actions withTechnology.
If we apply this thinking of businesses moving from historical data, to real-time data, to controlling future actions to the energy industry, the narrative and background is clear.
Utilities have used historical consumption data to plan their transmission, distribution and generation infrastructure projects. Expected demand increases driven by population growth are usually considered when proposing 5- to 7-year transmission, distribution and generation capacity expansion projects. This is all to ensure customers are never without energy, even during the highest usage days.
"Consumption information is great; it helps the grid to better plan for supply. But, without advanced metering infrastructure information (AMI) being coupled with other load adjusting internet of things (IoT) control technologies the grid doesn’t fully benefit from the full potential positive impact "
To prevent blackout, electric grids must be built to ensure supply to consumers during peak capacity – the times of highest power usage. But due to the complexities created by a highly matrixed infrastructure, the grid is inefficient and overbuilt.
To deter high usage peaks during the day, utilities put demand multipliers on many commercial customer bills called demand charges. A demand charge disincentivizes commercial customers from using energy all in a single time frame. For example, a factory would be wise to spread out its production more evenly, reducing a peaking effect.
Advanced metering infrastructure aka “smart meters” allow consumers, utilities and service providers to access electricity usage down to the second-by-second basis. If we take a look at the low hanging fruit again such as reducing peak, here are some ways smart meters have created opportunities/markets to do so.
1. The most basic technology that has arisen from smart metering is energy monitoring, tracking and visualization platforms. This provides customers with awareness of their end use consumption, which can create new, lower usage patterns. Some platforms include a hub that communicates directly with your smart meter installed by your utility. Smart meter data can then be deconstructed or disaggregated to view the types of devices were pulling electricity at any given moment - dishwasher, HVAC, coffee maker, lights and more with relatively high accuracy. If usage visualization tools are not provided by your utility by way of increases in their tariffs/rates, some devices can be directly hooked up on a circuit by circuit basis
2. With access to real-time usage data, some utilities have instituted time of use (TOU) programs to better align grid costs with billing structures, with a set of incentives and disincentives depending on what time of day energy is used from the grid. For example, during the afternoon congestion hours, kWh rates are higher; during the evening/morning off-peak hours, rates are favorable.
3. In addition, many utilities and independent service operators (ISOs are groups of utility grids in an overall market) have created demand response programs to cut peak on their grids to reduce waste and costs during peak demand. A demand response program provides payments to those who can guarantee a certain amount of energy curtailment if they are called upon. What happens in abundance today is that the grid operator sends a signal out to demand response aggregators who then communicate to their predominately commercial customer sets to cut a predetermined load. Sometimes commercial customers have backup generators, sometimes they just stop operations. But still, the majority of the demand response market is controlled via a simple phone call.
Control Energy Use with Technology/Hardware
With real-time data inputs mentioned above, all types of hardware technology have come out through third-party services to take control of a home’s or business’s usage. By combining historical and real-time usage, the ability to forecast demand gets much easier when you’re able to control it. When consumers have control over their usage, they’re able to avoid high cost rate structures put in place by the utility and create a more resilient, sustainable grid.
1. A smart thermostat can reduce energy peak demand by pre-cooling a home ahead of forecasted energy spikes. The HVAC system (controlled by the smart thermostat) generally can account for most of a home’s usage during peak. And, when this technology is paired with a demand response it can be very powerful in reducing peak demand on the grid.
2. Much like smart thermostats, there are controllers that can come with or can be attached to hot water heater tanks. While hot water heaters don’t account for a majority chunk of your demand, it is still significant. Water heaters can essentially turn into a thermal battery. Much like a thermostat, water heaters can be pre-heated or disengaged to shed load based on consumer usage trends. We can avoid grid spikes by simply pre-heating a water heater ahead of use.
3. Lithium ion energy storage is becoming more economical. The unique thing about this technology is that energy can be deployed at any time for hours at a time. When combining real-time demand and grid capacity signals, energy storage can curtail demand behind the meter to shave peaks and pushmore power onto the grid. And, when coupled with solar, batteries can charge when solar has excess/unused generation when a homeowner is away. This technology can be implemented at the residential level or in front of the meter at a utility scale.
4. An electric vehicle (EV) could theoretically be used as a storage device for a home to curb peak power because EVs often sit idle. This vehicle-to-gridcould have major impacts based on forecasted EV adoption. The hurdle is for EV makers to warrant battery use in this fashion (pushing and pulling energy for use other than from a vehicle) due to battery chemistry limitations and concerns. Another hurdle is the lack of two-way communication with the state of charge of a vehicle to the controller of battery operations when plugged in.
Consumption information is great; it helps the grid to better plan for supply. But, without advanced metering infrastructure information (AMI) being coupled with other load adjusting internet of things (IoT) control technologies the grid doesn’t fully benefit from the full potential positive impact.
While smart meters and technology controls come with privacy concerns due to the level of granularity and control, they can and do help utilities plan electricity generation, transmission and distribution, and service providers help consumers reduce their energy usage, work toward a more sustainable grid and save money.