Smart Metering for greater energy efficiency

Introduction
Most industries embrace the idea that unfettered and constantly increasing customer demand is a good thing. But the electric industry is taking a different tack. Unconstrained demand is beginning to be actively discouraged.

Increasingly intense seasonal demand peaks, combined with increasing pressure on infrastructure investment, are causing the industry to look for ways to more intelligently manage demand. Smart metering is one answer.

Driving the revolution
Peak energy demand is markedly increasing, even in temperate climates. In London, the summer peak is growing at 2.6% per annum compared to an average growth of 1.4% per annum. In hotter climates the effect is even more apparent. One distribution system operator in Australia is quoted as saying that 30% of its infrastructure operates for 2% of the year. The trend is for usage peaks to get taller and narrower, reflecting the sharp intensity of demand on the few hottest summer days.

Inflexible industry infrastructures are another factor. Electricity distribution networks are not readily configurable to meet rapidly changing demand patterns, and CAPEX requirements to implement new infrastructures are significant. Also, the potential for popular resistance to the construction of new electricity infrastructure is always present.

The traditional response to increasing demand – invest in new infrastructure – is no longer viewed favorably. Pressured by stakeholders and regulators, the electric industry is looking for new solutions.

Creating more energy efficient consumers
Governments, regulators and network operators have come to the conclusion that the consumer needs to become more energy efficient. Their phased approach includes education, incentives, and direct management.

• Educating the consumer – The pressure is mounting for utilities to give more information to consumers on their energy consumption. The objective is to appeal to the consumer to be more aware of the nature of their consumption patterns and of the consequences.

This education process includes providing the customer with a real-time display that shows consumption and highlights peaks and troughs. Also the utilities can provide detailed information on consumption and carbon footprint compared to the previous period and plotted against some norm for that type of customer.

The hope is that by providing this type of information, consumers will be motivated to reduce their peak consumption. However, research suggests that this is only effective where the consumer is already interested in this information and has some understanding of what is involved in achieving more efficient energy consumption.

• Incenting the consumer – Because the educational approach has limited effectiveness, movements are already underway toward the next step – incenting consumers to modify their energy consumption habits. This requires a more sophisticated approach to tariffing than has been possible so far.

For example, by introducing multiple time-of-day tariffs, which can vary by day of week and by season, customers can be persuaded to adapt their consumption to take advantage of the lower tariffs. Figures 1 and 2 shows a sample tariff plans for summer and a winter weekdays.

Figure 1: A possible summer weekday tariff structure

Figure 2: A possible winter weekday tariff structure

Weekends and public holidays might have different profiles depending on the season.

Another example is tariffing based on instantaneous demand. Figure 3 shows a possible tariff structure for a home. The curve represents the home’s instant energy demand ¬– a morning peak followed by the cut in of the air-conditioning during the day. Energy demand reaches a peak in the evening from the impact of all the electrical appliances running simultaneously. Demand then tails off as external temperatures cool and the household members settle into their evening activities.

Figure 3: A tariff regime based on instantaneous consumption

The tariff regime shown is designed to encourage the consumer to smooth this demand. For example, air-conditioning could be turned off during the day when the house is unoccupied, or some domestic tasks requiring energy can be moved to later in the evening to benefit from the lower costs. This cost structure also accurately reflects the increasingly higher charges incurred by the distribution and retail companies for incremental power.

These and similar approaches require a change in measurement practice. Needed are the types of technologies and capabilities commonplace in the cellular communications market that allow the real-time rating of consumption in order to support more complex tariff regimes.

Like the telecommunications market, this approach allows “special offers” to be created by energy suppliers (for example, a tariff holiday).

The answer is smart metering that combines a smart meter with an intelligent meter data management system.

• Controlling the consumer – In the long-term, distributors or energy retailers will want to be able to incent customers to allow them to control non-essential demand. For example, in exchange for a favorable tariff, customers would allow the distributor to regulate their air conditioning in order to shed load at times of excessive demand. Reducing air conditioning across all the offices and homes of a big city by just one degree will result in a significant reduction of load – perhaps enough to avoid the power outages that are already occurring in peak weather.

The technology is already available. Domestic appliance manufacturers are implementing standard remote control protocols. All that is required is the political will and a rollout of enabled smart meters.

Figure 4: The smart home of the future (Source:Fraunhofer/ISE)

Features and benefits of Smart Metering
Smart metering can deliver a wide range of features and benefits to both the electric companies, distributors and consumers. For example, smart metering capabilities enable the recording and of usage data within the meter at configured intervals for a set amount of time. Remote interval meter reading allows the utility to interrogate meter usage data at configured intervals that can range from every 15 minutes to every three months, or on an ad hoc basis for a one-off reading.

Meters can be activated remotely and configured with a maximum capacity. They can also be remotely deactivated and not assigned to a customer account, or suspended – i.e. deactivated but retaining customer account configuration information.

In addition, the smart meter can power a display unit, probably remote from the meter itself, that could provide data on the consumer’s current and historic energy consumption. This information could also be made accessible via a web browser interface to the customer account.

Smart metering enables the assembly and sorting by customer type and geography of individual customer data, or retailer. The technology also can provide the statistics needed to manage the service – for example, gross demand from a given geography by time over a given period; or gross demand by customer type over a given period. Smart metering also allows the data to be formatted for transmission to the retailer and archived for future analysis.

Tariffing and rating are also enhanced by smart metering. It allows operators to apply the traffic plan that is appropriate to a particular customer, customer type, and retailer, and create appropriate billing records for transmission to the customer. The technology allows these activities to take place in real time, an important capability in the case of pre-paid metering.

Various credit issues can be resolved. Operators can implement a rules-based decision tree that prompts specific actions when credit expires or a credit limit is reached depending on the customer’s or retailer’s profile. Also, when credit becomes an issue, the operator can temporarily reduce power to a “social minimum,” or configure the meter to suit the particular customer’s circumstances.

Another smart metering capability is loss of power notification – when a power outage occurs, the meter can transmit a “last gasp” signal that alerts the distributor of a failure in the network.

Over the long term, smart metering will provide the ability to register remote devices in the premises, read their configuration, and, based on suitable authority, to regulate them. Other devices could be activated by the meter – for example, a washing machine could be turned on when the lowest tariff threshold is reached.

Other benefits include:
• Reduced reliance on physical visits to customer premises
• Reduced incidence of electricity theft
• Simplified implementation of pre-paid energy, removing any need for physical interaction with the domestic meter
• Speedy identification of outages leading to more rapid service repair and restoration

One early adopter is ENEL in Italy. Convinced by the overall business case, ENEL has implemented 30 million automatic remote reading meters. ENEL had invested 2B€ through the end of 2006 and has reported 500M€ in savings per annum.

What needs to be implemented
In addition to the smart meter, as shown in Figure 5, there are four key elements that need to be considered:
• Access and backhaul
• Meter data management system
• Tariff management system
• Asset management system

Figure 5. The elements of a smart metering implementation

Access and backhaul
There is no one access and backhaul solution, since implementation depends on a number of factors such as population density, existing communications infrastructure, and any U-Telco activity.

Instead there is often a mix of solutions – for example, wireless in urban areas, and power line communications (BPL) in rural areas. Other types of access/backhaul network technologies that can be used include GSM/GPRS, WiMax, meshed WiFi networks, use of existing broadband (DSL) connections, 870MHz unlicensed radio, and Zigbee. Some of these communication mechanisms allow only one-way communication, but most are already configured for two-way communication. This will ultimately enable the utility company to not only measure consumption, but also to actively influence and control it.

Meter data management system
This system is at the heart of the smart metering operation. The meter data management system provides the following capabilities:
• Manages the collection of metering data
• Organizes data by customer, by customer type, by geography, by retailer, or any other relevant criteria
• Ensures the consistency and integrity of the data received and its safekeeping
• Manages the customer profile – customer status, meter rating, tariff profile, and any scheduled activities
• Manages meter configuration

Tariff management system
This is another key element of any implementation. It is this system that enables the charging flexibility required to encourage consumers to change their energy consumption habits. The tariff management system is similar in many respects to the charging engines developed for cellular mobile applications in the telecommunications market.

The system’s key capabilities include:
• Handling multiple tariff options for the same class of customer
• Handling multiple account classes such as accounts based on an individually contracted consumption profile, and account associations – for example, linking multiple meters into a single account for to accommodate holiday homes or support for aging parents
• Rating and calculating credit in real-time
• Reacting in real-time to credit anomalies, such as the expiration of pre-paid credit, according to rules set for that class of customer
• Allowing retailers and individual consumers secure, on-line interrogation of their accounts

Asset management system
This system allows the operator to keep track of all the different assets involved and their interconnections to form the smart metering network. Alcatel-Lucent is skilled in the design and integration of turnkey solutions that pull together these three elements and integrates them with the customer premises meter.

Conclusion
Smart metering is seen as a key tool in building flexibility into the customers’ energy demand profile. It can offer utilities the ability to influence customers’ consumption in the face of rapidly rising energy demand, increasingly sharp demand peaks of demand, and the problems associated with the inflexibility of the underlying energy infrastructure.
By using a meter data management system that allows utilities to implement flexible tariffs, consumers can be incented to spread or reduce their demand profile.

At the heart of the smart metering solution is the meter data management system. This is the engine that will allow utilities to accurately measure, tariff, and bill customers. Ultimately, it will allow utilities to control demand if and when this practice becomes acceptable.