News - March 2012

Why generators are terrified of solar - 30 Mar 2012 

This link provides access to a pair of graphs that demonstrate most vividly the merit order effect and the impact that solar is having on electricity prices in Germany; and why utilities there and elsewhere are desperate to try to reign in the growth of solar PV in Europe. It may also explain why Australian generators are fighting so hard against the extension of feed-in tariffs in this country.

The first graph illustrates what a typical day on the electricity market in Germany looked like in March four years ago; the second illustrates what is happening now, with 25GW of solar PV installed across the country. Essentially, it means that solar PV is not just licking the cream off the profits of the fossil fuel generators – as happens in Australia with a more modest rollout of PV – it is in fact eating their entire cake. 

Green Internet and Cyber-Infrastructure - 30 Mar 2012 

This blogs talks about how the Internet and cyber-infrastructure can help create a low carbon society.

Governments around the world are wrestling with the challenge of how to reduce carbon dioxide emissions. The current preferred approaches are to impose carbon taxes and implement various forms of cap and trade, which effectively is a hidden tax. However another approach to help reduce carbon emission is to “reward” those directly who reduce their carbon footprint. One possible reward system is to provide homeowners with free fiber to the home or free wireless products and other electronic services such as ebooks and eMovies if they deploy micro renewable energy sources for their ICT equipment. Not only does the consumer benefit, but this business model also provides new revenue opportunities for network operators, optical equipment manufacturers, and eCommerce application providers.

Linking renewable energy with the Internet using eVehicles and pathway charging, may provide for a whole new "energy Internet" infrastructure for linking small distributed renewable energy sources to users. 

Increase in worldwide installed prepaid electricity meters - 30 Mar 2012 

According to a new report from Pike Research, the installed base of prepaid electric meters in 2011 was over 20 million worldwide, and is expected to surpass 23 million in 2012. With a compound annual growth rate (CAGR) of 9.1% from 2010 to 2017, the installed base will reach about 33.7 million meters on a global basis in 2017.

Improved customer service has become a key business priority among utilities, offering more choices for customers, including prepayment of electric utility bills. The prepaid option offers many benefits to consumers allowing them more choices.

As utilities increasingly take advantage of prepaid programs in the coming years, they will have a growing need for software and services to support their prepaid systems. The prepaid services market is expected to reach $263 million, while the prepaid software market will account for about $210 million in revenues on a global basis in 2012.

Smart grid market focus shifts to applications - 30 Mar 2012 

According to Pike Research, 2012 represents a turning point for smart grids where they must prove their value, both in operational and financial terms. The smart grid promises a dramatic transformation of the world’s electricity infrastructure, with a long list of goals essential to maximizing efficiency and diversifying future energy supplies.

Smart grid deployment has been taking place at a relatively rapid pace. Some 200 million smart meters have been deployed worldwide, 40 million of them in North America.

Utilities need to prove to both end-use customers and regulators that the adoption of smart grid technologies, such as smart meters, has been worthwhile in either reducing costs or boosting energy efficiency.

Pike Research’s smart grid industry predictions include:

• Smart meters will shift from deployment to applications
• Dynamic pricing debates will escalate
• Cyber security failures will become almost inevitable
• Consumer backlash against smart meters will not go away
• Distribution automation and AMI will intersect
• Microgrids will move from curiosity to reality
• Asia Pacific smart grid adoption will accelerate

NIST reports on smart grid standards - 29 Mar 2012 

In 2010  the National Institute of Standards and Technology (NIST), charged the Smart Grid Advisory Committee (SGAC) with providing input to NIST on: 

• the Smart Grid standards, priorities, and gaps, and
• the overall direction, status, and health of Smart Grid implementation by the Smart Grid industry, including identifying issues and needs. 

The SGAC formed four subcommittees to address this challenge.   Over the ensuing 14 months, the subcommittee members have worked with and interviewed Smart Grid industry stakeholders, including industry associations, companies, and state and federal regulators, to gather, consider, and analyze information and produce this status report. Through its efforts, the SGAC has identified several common emerging themes across the diverse Smart Grid stakeholder landscape.

Emerging Themes from the NIST SGAC Report

• Prioritize, streamline, and leverage NIST Smart Grid activities
• Need for consistent state regulatory support for Smart Grid standards development
• Need to continue the focus on transparency, roles, and responsibilities
• Consolidation of cybersecurity activities and research 
• Urgent need for a communication plan and an education and outreach effort

The Committee through its interview process has also identified themes within each section of this report relative to NIST’s short‐term, mid‐term, and long‐term goals, as well as its research activities.  These themes are outlined below.

Short‐ to Mid‐term Challenges and Recommendation

In assessing the challenges and recommendations for NIST in the short‐ to mid‐term, the SGAC Subcommittees One and Two interviewed 21 Smart Grid stakeholders, primarily from the11  electric utility and state regulatory communities actively engaged in the SGIP.

The following four themes emerged:

• Reliability and implementation review of interoperability standards is critical
• Prioritization of the standards, processes, and forums are necessary for greater utility
• Urgent need for a communication plan and an education and outreach effort for greater utility and state participation.
• Need for regulatory certainty to ensure cost recovery of investments related to Smart Grid Deployment

Long‐term Evolution of the U.S. Smart Grid Effort 

The SGAC Subcommittee Three focused on defining the structures, roles, and relationships of the U.S. Department of Energy, NIST, and the SGIP as they are now and as they will need to evolve to advance the goals of the Smart Grid five years in the future.    The following three themes emerged from the subcommittee’s research

• NIST will need to organize for its changing role by 2015 and beyond  
• Over the next five years, there will also be a need for interagency collaboration
• NIST will need to reach out to industry to seek further input

Recommendations on NIST Smart Grid Research Activities

In Section Three, the SGAC Committee Four interviewed 15 Smart Grid stakeholders and gathered specific recommendations regarding areas of NIST Smart Grid research.  The following are three of the major themes that emerged:

• Facilitator of Multi‐Stakeholder Smart Grid Research Collaboration
• Collaboration with Utilities and Private Sector
• Continue Research in Electric Power Metrology

For the full report see: NIST Smart Grid Advisory Committee Report 

NBN facilitates wind farm - 28 Mar 12 

In March 2012, AGL Energy bought the right to develop the Silverton wind farm in the far west of NSW, 25 kilometres northwest of Broken Hill.

The wind farm's first stage of construction, due to begin in 2013, will consist of 282 turbines. Subsequent construction stages, still subject to approval, could result in a further 316 turbines being built.

A critical factor in the purchase was, according to the company, the availability of the NBN. Without access to this infrastructure the company would have needed to invest between $30 and $50 million for a microwave based communication system, which would have made the project economically unviable.

Electricity Prices in Australia: An International Comparison - 21 Mar 12 

It is commonly considered that Australia’s electricity prices are low in comparison to those in other developed countries. However, household electricity prices in Australia have risen by more than 40% since 2007, and are projected to rise by another 30% by 2013/14. This report was commissioned to assess how contemporary Australian electricity prices compare internationally.

Electricity prices in other developed economies have been stable or have risen (and in some cases declined) very gradually over the last decade. The sharp increase in Australian electricity prices combined with changes in exchange rates has meant that average electricity prices to households in Australia are now higher than those in Japan, the EU, U.S. and Canada. The gap may widen after taking account of further expected price rises in Australia.

The analysis shows that change in exchange rates between 2007 and 2011 have increased the difference between household electricity prices in Australia and those in the U.S., the EU and Canada. However exchange rate changes have been less significant than rising prices: even if 2007 rates of exchange are used, household electricity prices in Australia in 2011/12 are still higher than those in the EU, U.S., Japan and Canada.

As shown in Figure 3, out of 91 comparator countries, states or provinces, household electricity prices in four Australian jurisdictions in 2011 were in the top six. They are South Australia (third highest), New South Wales (fourth highest), Victoria (fifth highest), and Western Australia (sixth highest). Tasmania is the eleventh highest and only Queensland (sixteenth), the Australian Capital Territory (twenty-first) and the Northern Territory (twenty-ninth) lie outside of the top eleven.

EU recommendations for smart metering systems in Europe - 20 Mar 12 

These recommendations cover data security and protection measures, and also include a methodology for a long term cost-benefit analysis.

Currently only 10% of European households have some sort of smart meter installed. Where economically worthwhile, 80% of all electricity meters in the EU have to be replaced by smart meters by 2020. In this regard member states are required to complete a cost-benefit analysis by September 3, 2012.

The recommendation is aimed to ensure “the fundamental right to protection of personal data” and sets out the procedure for undertaking a data protection impact assessment describing the envisaged processing operations, an assessment of the risks to the rights and freedoms of data subjects, the measures envisaged to address the risks, safeguards, security measures and mechanisms to ensure the protection of personal data.

A “data protection by design” and “data protection by default” approach is recommended to ensure data is protected with only the minimum level of personal information collected. 

Smart Cities – Making life in the city more sustainable - 19 Mar 12 

The concept of smart communities is based on intelligent infrastructure such as broadband (FttH) and smart grids, so that connected and sustainable communities can be developed. However, before these smart communities can be built, a range of social and economic policies and strategies need to be developed. 

The Australian government has already launched two significant trans-sector projects: the NBN (national broadband network) and the Smart Grid/Smart City project. These projects provide answers as to how these diverse issues can be addressed within one national blueprint.

In many cities around the world high density living is the norm and attention is now turning towards making this style of living more sustainable. Technological innovations include water harvesting and reuse, and solar collection and energy-efficient appliances, including those used for heating and cooling. Sustainable urban transport systems are also on the agenda for many governments.

Economic data all points towards a green and digital economy that will create a large number of new jobs and offer business opportunities for innovative entrepreneurs. And if Australia can maintain its leadership role that would support its export earnings also.

The 2nd Annual Smart Cities Conference, hosted by Tonkin Corporation and running from April 30 at The Grace Hotel Sydney, is an industry-based event, focusing on the growing importance of Information and Communication Technologies (ICTs) on infrastructure, highlighting the important drivers of urban growth, examining the relationship between energy efficiency and climate change, the effect and effectiveness of Smart Grids and the interesting concept of smart growth.

This will be a cross-industry forum for engineering companies, local businesses, state and local government departments, transport organisations, urban planners, consultants.

For more information see - http://www.tonkincorporation.com/images/Eureka/ENG31E.pdf

USA and Europe collaborate on smart grid infrastructure - 18 Mar 12 

A number of key recent developments have occurred in the US’s fast changing smart grid market.

Firstly, the number of smart meters installed (though not necessarily activated) has risen rapidly. In part this is due to federal government stimulus funding, which continues to factor significantly. The Federal Energy Regulatory Commission (FERC) recently found that the penetration of smart meters managed by some 420 utilities reached 13.4% of households by the beginning of 2012, compared to 8.7% at the end of 2009. Including non-activated installed meters, the proportion jumps to 18% penetration. Many of these meters have been installed as a result of the Recovery and Investment Act, which is expected to fund 15.5 million installations alone. Some estimates suggest that between 50% and 75% of electric meters in the US will be smart by 2016, and that up to 100% will be by 2020.

Further assistance – to the tune of $25 million – has been ear-marked to utilities in eight states to install smart grid technologies and improve their generation and transmission capabilities. The money is on top of the $250 million committed by the USDA Rural Development for smart grid technologies, of which about half has been spent.

In addition, the Department of Energy recently proposed spending $20 million to create an Electricity Systems Hub or a number of regional hubs during 2013. The Hub(s) would help coordinate the numerous difficulties which arise from changes to distribution and transmission systems on the regional and local level. The money is a welcome boost given that the Department has also proposed reducing funding for smart grid research and development by a quarter for 2013.

On a higher level, further cooperation is expected between the US and the European Union following a memorandum signed at the end of 2011 to improve standardisation between the regions, relating both to devices and entire transmission systems.

Henry Lancaster
Senior analyst BuddeComm, North America

For further analysis on the US’s smart grid market, see the updated report USA - Smart Grid - Statistics and Surveys – 2012.

NSW merges major electricity companies - 18 Mar 12 

The New South Wales Government has announced a major shake-up to the state's electricity sector which it says will save $400 million and reduce household bills.

The state's three energy providers, Ausgrid, Endeavour Energy and Essential Energy, will become one group.

The Government says the merger will save money because there will only be one board.

It has also announced a $75 Family Energy Rebate for households on a joint income of up to $150,000. 

Worldwide smart meter shipments - 15 Mar 12 

According to the IDC Energy Insights' Worldwide Quarterly Smart Meter Tracker, worldwide smart meter shipments in the fourth quarter of 2011 (4Q11) grew 11.8% over the previous quarter (3Q11) and were up 23.8% when compared to the fourth quarter of 2010.

It is expected that annual smart meter shipments will surpass 140 million units worldwide by 2016, up from 25.4 million in 2011. This represents a compound annual growth rate (CAGR) of 32.9% over the 2011 to 2016 forecast period.

The renewal of the Canadian market and an increase in shipments to Central and Eastern Europe were the primary drivers in the closing quarter of 2011. In 2012, smart meter shipments in Europe will increase as country-level planning continues to progress.

Shipments will also increase in the Asia/Pacific region as the markets in China and India begin to integrate advanced metering infrastructure (AMI). Smart meter activity is expected to shift from North America and Europe to the developing world. This shift will be accompanied by an evolution to meet a new set of market needs.  

U.S. electric smart meters - 15 Mar 12

According to research group NPD, 75% of the electric meters in the U.S. will be smart, digital meters by 2016.

Other research groups have predicted that the rate of the installation of smart meters will be a bit slower in the U.S. In 2011, Berg Insight predicted that the penetration rates for smart meters would reach 50% by 2016 in the U.S. and up to 100% by 2020.

President Obama had a goal in 2009 to have 40 million smart meters and 3,000 miles of transmission lines installed funded by a $4 billion stimulus package. Because the stimulus money had been allocated and was being spent, there was an increase of smart meter installation growth in 2011 but the rate of installation will be slower in the next few years.

The research also found that:

• Globally, smart meter revenue will surpass $12 billion in 2016.
• ZigBee is the smart meter home-area network technology leader, while powerline and wireless are leading for smart meter backhaul.
• China will deploy 280 million smart meters by 2016.

Smart grids in Malaysia - 15 Mar 12

Malaysia’s largest utility, Tenaga Nasional Berhad (TNB), has undertaken an ambitious Smart Grid demonstration project working with 5,000 customers in 3 different cities. The project will help to meet the need of Malaysia’s energy consumption which is expected to increase by 5% per year over the next five years, and is likely to double in the next 20 years.

Some of the goals that the project is aiming for include: 

• reducing the nation’s dependence on natural gas and coal,
• withdraw from national electricity subsidies in the next 4 years
• reduce carbon emissions to 40% of the 2005 level
• increase the renewable energy levels to 2,080 MW 4,000 MW by 2020 and 2030, respectively.

In addition, the Smart Grid will help Malaysia’s utilities reduce grid operational costs and improve energy efficiency. 

The GridWise Alliance reports on the state of smart grid - 08 Mar 12 

A new report from GSGF member the GridWise Alliance explores the current state of the nation’s power grid and sets forth the real-world benefits of a modernized electric system. The report, entitled “Realizing the Value of an Optimized Electric Grid,” is aimed at federal and state regulators. Findings showcase the ways in which grid initiatives are already leading to improvements in electric reliability, energy savings, customer engagement, and more.

“This is an important time as decision makers look for data from completed [smart grid] projects to ensure that their upcoming initiatives are deployed efficiently and effectively,” says James W. Morozzi, President and CEO of the GridWise Alliance. “This report aims to provide those making decisions with real examples of positive grid transformations occurring around the nation.”

The report is underpinned by case studies based upon first-person interviews with industry stakeholders. The success stories cited include a 20 percent reduction in energy consumption resulting from Pacific Gas & Electric’s energy efficiency program; a 47 percent reduction in the average duration of power interruptions for Southern California Edison customers; and a 9 percent reduction in overall energy consumption following Oklahoma Gas and Electric’s (OG&E) implementation of demand response.

Even as it informs readers about already-realized benefits of grid modernization projects, the GridWise Alliance report reminds of the challenges that persist, including technology readiness; market readiness and risks; realization of potential benefits; impacts of financial support; and customer engagement.

US consumer support for clean energy declines - 8 Mar 12 

A new survey from Pike Research shows that consumer support in the US for clean energy concepts including renewable energy, alternative fuel vehicles and smart grid technologies, has declined significantly between 2009 and 2011.

More than 1,000 U.S. adults we surveyed in the fourth quarter of 2011. The results found that the average percentage of consumers with an “extremely” or “very” favorable view of 13 clean energy concepts declined from 50% in 2009 to 45% in 2010, and dropped further to 43% in 2011.

Among the 13 clean energy concepts, Biofuels favorability declined from 56% in 2009 to 39% by 2011. Favorability ratings of Smart Grid and Clean Coal each fell 10 points over the two-year period.

The percentages of survey respondents stating that they had either a “very favorable” or “favorable” view for each of the 13 concepts in 2011 were as follows: 

• Solar Energy: 77%
• Wind Energy: 71%
• Hybrid Vehicles: 61%
• Electric Cars: 55%
• Natural Gas Cars: 51%
• Clean Coal: 42%
• Nuclear Power: 40%
• Biofuels: 39%
• Smart Meters: 38%
• Smart Grid: 37%
• Carbon Offsets/Credits: 19%
• LEED Certification: 18%
• Cap and Trade: 14%

Carbon Offsets/Credits earned the largest percentage of “strongly unfavorable” or “somewhat unfavorable” views from survey participants, with a 25% unfavorable rating, followed by Nuclear Power with a 23% unfavorable rating and Cap and Trade with a 22% unfavorable rating.

LEED Certification, the green building certification program administered by the U.S. Green Building Council, suffered from a very low level of familiarity among respondents – 45% stated that they were unfamiliar with the program, the lowest level of familiarity of any of the 13 energy and environment concepts.

Final Smart Grid Framework - 08 Mar 12 

The National Institute of Standards and Technology (NIST) has recently finished reviewing and incorporating public comments into the NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 2.0

The framework includes a plan for transforming Australia’s aging electric power system into an interoperable Smart Grid, a network that will integrate information and communication technologies with the power-delivery infrastructure, enabling two-way flows of energy and communications.

The final version includes input from a range of stakeholder groups, including representatives from trade associations, standards organizations, utilities and industries associated with the power grid.

The final 2.0 Framework adds 22 standards, specifications and guidelines to the 75 standards NIST recommended in the 1.0 version of January 2010 as being applicable to the Smart Grid. Further improvements and additions to the 1.0 version include: 

• a new chapter on the roles of the SGIP;
• an expanded view of the architecture of the Smart Grid;
• a number of developments related to ensuring cybersecurity for the Smart Grid, including a Risk Management Framework to provide guidance on security practices;
• a new framework for testing the conformity of devices and systems to be connected to the Smart Grid—the Interoperability Process Reference Manual;
• information on efforts to coordinate the Smart Grid standards effort for the United States with similar efforts in other parts of the world; and
• an overview of future areas of work, including electromagnetic disturbance and interference, and improvements to SGIP processes.

UK Smart Home Energy Management Device Market - 08 Mar 12 

According to a recent study from IMS Research, in the next five years, over £2.4 billion will be spent in the UK on smart home energy management devices including smart meters and in-home devices that can ‘talk’ to them.

Smart meters will be installed in most UK homes by 2019. These meters provide two-way communication between electricity or gas meters and utility companies via an Advanced Metering Infrastructure (AMI) network, enabling the companies to measure how much electricity consumers are using remotely and send signals back to the meter.

The UK has outlined a regulatory framework for when smart meters are installed which includes the provision of ‘in-home displays’ or ‘IHDs’. These are used to let consumers know how much electricity they are using and help them to manage their electricity consumption.

Smart meters also support the creation of new, variable electricity tariffs, such as ‘dynamic pricing’ programs which involves market-led tariffs charging the highest unit prices when demand is highest.

There is also the potential for widespread load-shedding or demand-response programs. This is when the utility company sends a signal to the smart meter via the AMI network to request that electricity consumption is reduced or temporarily halted. This can be automated, through the deployment of devices such as ‘smart thermostats’ to adjust radiator settings; and through ‘smart load control switches’, which are used with electric storage water heaters.

A range of other UK companies are also looking at smart energy management solutions, from relatively small start-ups to major telecommunications companies. They are expected to become more active in improving UK households’ green credentials by offering consumers a way to manage their electricity consumption online, letting them remotely control devices such as thermostats and individual plug sockets. A study published by IMS Research projects the market for smart home energy management devices in the UK – not including the smart meters themselves – to reach over £500 million in 2016.

Smart meters and other smart in-home devices can offer a range of benefits. However, there are concerns associated with the technical infrastructure required, with a number of parties awaiting further specific technical specifications. Plans outlined by UK electricity retailers for restructuring electricity tariffs to take advantage of smart meters are being described as too complex; although UK distribution network operators are stating that making tariffs simpler will make them less effective. Consumer groups are also concerned about privacy and data security, as well as potential health problems resulting from radiation.

The effectiveness of the in-home displays have also been questioned, with many in the industry expressing concern that while such displays may be engaging in the short term, consumer interest will soon decline.

The benefits of smart meter deployments for consumers include the end of ‘estimated billing’ and in the long term, variable pricing tariffs are likely to be able to engage consumers, even if IHDs do not. For utility companies, benefits are expected to include avoided costly visits to read meters, fewer enquiries, and lower customer overheads. For device suppliers and service providers, these developments present a major opportunity to develop many new revenue avenues which include providing devices with the ability to communicate with smart meters and offering home energy management and control platforms.

Utility customers worldwide use social media to engage with their Utilities - 05 Mar 12 

According to a recently published report “Social Media in the Utility Industry” from Pike Research, power utilities choice to ignore and avoid social media is no longer viable.

Although some utility managers remain wary of the potential risk involved with social media, conversations are already taking place beyond the utility’s control, where sometimes false or misleading information can potentially damage the brand. It is in the utility’s own best interest to engage with customers in social channels which will give them a chance to steer the conversation.

The research estimates that approximately 57 million customers worldwide will use social media to engage utilities in 2011. Expectations are for that number to rise to 624 million customers by the end of 2017.

Utilities successfully participating in social media will follow a set of best practices that includes:

• knowing their customers’ social media preferences and profiles
• clearly defining their social media objectives and articulating a strategy for their social media efforts and
• selecting and deploying appropriate technologies that integrate social media with existing channels.

Smart Grids for Native Americans - 01 Mar 12 

The US Energy Secretary announced that the US Department of Energy (DoE) awarded tribal clean energy projects US$6.5m. This will be split between 19 projects that will promote clean energy within their respective communities.

Since 2002, the Energy Department’s Tribal Energy Program has paid out US$36m to 159 tribal energy projects. As of 2007, there are 11 Native American Utilities of varying sizes and makeup and renewable energy is a money-spinner for some tribes. With 55 million acres of land at their disposal, Native American Tribes could generate 535KWh of wind power, and 17 trillion KWh of solar energy.

This includes smart grid initiatives of the Navajo Tribal Utility Authority (NTUA,) who installed a smart grid for electric, water and gas service for  40,000 customers across the Navajo Nation. NTUA also developed a smart grid training program.

In 2010, the Campo Kumeyaay Nation (near San Diego) launched a 50MW wind farm, and partnered with San Diego Gas & Electric to develop an even bigger smart grid.

For more information see Engerati.