The grid gets smarter

Honeywell’s Steve Smith and Tantalus Systems’ Eric Murray look at the rise of the smart grid and the critical role of AMI in making it a reality. Smart metering not only enables a utility to better react to grid events through intelligent grid capabilities; it also enables companies to better serve customer needs and adds significant operational efficiency. So how can utilities ensure they get smart grid implementation right? Our experts explain.

PE. A smart grid is only truly smart if it involves the end-user and facilitates their efficient and intelligent use of energy in a cost-effective manner. How can electric utilities address this challenge?
SS. Utilities have been working with their customers for decades to facilitate efficient energy use. The smart grid is a new and exciting technology path that will aid utilities in their efforts. Through the introduction of grid-enabled technologies such as AMI, utilities can deepen their impact on intelligent consumption.

However, technology is just one component of an effective strategy. End-user education and incentives for energy-efficiency programs are others ways utilities are working to shape energy use. Marketing the benefits of demand response, for example, providing attractive rebates and incentives, and implementing user-friendly technology are necessary to augment smart grid technology.

EM. Unfortunately, there’s no magic bullet for this challenge. The first hurdle is for a utility to convince consumers that they must work in concert if significant conservation and cost containment goals are to be achieved. You have to show clearly to the customer what the advantage is to them (cost savings), make it easy to participate via clearly defined programs and easy-to-use technologies, and offer a full range of participation options.

Demand response, load control and smart thermostats are emerging technologies that are becoming more and more prevalent. DR is not easily implemented and requires careful thought and deployment, but if done correctly is an essential tool in conservation and cost reduction. Every customer has different lifestyle preferences and needs and the utility should offer them DR alternatives and options to realize program uptake and continued success. Keep your options open and don’t simply look at the device, but look at the way the communication network can be used to empower consumers and meet utility needs at the same time.

PE. Without mandates for strategies such as demand response, many utilities are struggling to make the business case for switching to smart meters. Could aligning demand-side management with energy efficiency help prove the dollar value of smart meters?
EM. Utilities should be careful to select a communications network that provides flexibility and scalability and allows them to expand their system with future applications and support additional types of DR and DA programs, as well as can support other commodities, specifically water and gas. Only a few years ago the smart grid was a theory, now it is becoming a reality. With increased interest in AMI, demand response and DA, utilities are starting to selectively implement Smart Grid solutions. A scaleable, multi-application communications network that can support a utility’s evolving needs is essential.

SS. Demand response and energy efficiency are a perfect fit with smart metering. Smart metering increases the effectiveness of demand response and energy-efficient technologies and strategies; and in return, the value of a utility’s smart metering system is enhanced. Smart meters provide more accurate measurement and enable time-of-use strategies that complement energy-efficiency programs. A good example of this connection is using demand response thermostats with an integrated in-home display to provide customers with real-time billing information tied to data from smart meters.

PE. Are AMI systems underappreciated as a vehicle for implementing new smart grid technologies? Can the AMI business case be improved by including additional operational benefits from new smart grid applications?
EM. Once the communications network is established, you can pick the most appropriate on-ramp to full smart grid functionality – whether it’s simply to automate the meter reading process, to improve operations and outage management, or to enact advanced load management and other DR applications.

But don’t just look at the dollars when building the business case. While the benefits promised by advanced metering are well documented and easily quantifiable, the soft benefits are often too hard to measure. Yet here – in faster response times, happier customers and staff, and the ability to address issues that once went undetected or ranked far down the priority list – is where much of the value of automation resides. Tantalus customers soon discover that AMI helps out in areas beyond those that appear on the bottom line. For instance, the ability to virtually eliminate estimated bills means that the hassles and headaches that come from unhappy customer calls, regulatory enquiries and burdensome administration have all but disappeared.

SS. The AMI business case definitely improves if additional benefits of the smart grid are incorporated into the analysis. Right now, for instance, electric utilities only find out about power outages from customer calls. With smart grid technology, which is predicated on two-way communication, they will be able to pinpoint outages quicker and with more accuracy. Improved outage management, better customer service and Web-enabled customer information are some of the great advantages of the smart grid that begin with AMI.

The exciting thing is that the smart grid is really in its infancy at this point, and there will be many interesting applications and strategies developed to help utilities manage demand and improve service delivery.

PE. The AMI market is heating up; technology, utility requirements, drivers and consumer expectations are all changing rapidly. How is your company responding to this evolving marketplace?
SS. Honeywell Utility Solutions has been working with utilities for more than 30 years. We are on the leading edge of delivering new programs and driving new technologies that help utilities better manage demand and improve customer satisfaction. The utility industry is unique, which is why we have a dedicated business within Honeywell whose only focus is the needs of utilities and their customers.

For example, we just announced an AMI implementation for the City of Tallahassee, Florida. The infrastructure, which will include more than 220,000 smart electric, gas and water meters, will help the city reduce its operating costs by an estimated $21 million over 15 years and boost customer service. In addition, the city will gain greater visibility into energy and water use. And the new infrastructure will give Tallahassee the ability to implement demand response and other energy-efficiency programs in the future.

To that end, Honeywell also recently introduced its UtilityPRO touchscreen programmable thermostat designed specifically for utility-sponsored demand response programs. The new thermostat will help utilities drive program participation, improve communication with customers and, ultimately, gain greater control over peak energy use.

EM. The Tantalus Utility Network (TUNet) provides the data communications capabilities that utilities need now with the capability to scale as the Smart Grid matures. Most recently, we’ve introduced new load control and smart thermostat products that allow utilities and consumers to effectively manage peaks and balance supply and demand. We’ve also made sure that our backend infrastructure – the servers and network controllers – can manage extremely high volumes of traffic and interface with every department and application within a utility, whether it be an electric only utility or one that also manages water and gas resources.

Our goal is to optimize the use of energy by automating practices, reducing operational costs and eliminating revenue/energy sapping problems, and giving both utilities and consumers easy access to the information needed to manage resources intelligently.

PE. Where do you see the AMI market headed next? What are the major challenges to the widespread adoption of smart meters, and what steps would you like to see taken to help drive the industry forward?
SS. The smart grid used to be about AMI. Now, AMI is only a component of the smart grid and utilities are thinking beyond the meter, looking for greater visibility into how and where their customers are using energy. However, implementing the necessary technology takes time. And helping utilities develop business cases that allow them to replace their legacy systems is a key factor in that evolution. Honeywell is committed to proactively working side by side with utilities to create strategic, successful smart grid implementations.

EM. The smart grid is not simply about technology. It’s about the opportunities that the technology unlocks. This intelligent infrastructure will serve as the backbone for sophisticated grid monitoring, automated control of applications and apparatus, and a variety of conservation and cost saving initiatives including load control, tiered pricing, pre-payment, online consumption profiles and in-home energy displays. It will give utilities a newfound ability to dynamically, reliably and economically maintain the critical balance between electricity supply and demand. Furthermore, it will give consumers the knowledge and tools they need to make intelligent decisions on when and how they consume electricity.

In the near future, all North American utilities will adopt smart metering and the supporting advanced metering infrastructure. The more visionary utilities will use this opportunity to implement a system that helps them realize operational and economic benefits, as well as positively influences the way their customers use and value energy.

Steve Smith is the Director of Sales and Marketing for Honeywell Utility Solutions – specialists in delivering turnkey utility projects for energy conservation, demand response and meter automation. Steve has an MBA from Northeastern University, as well as a bachelor’s degree in Electrical Engineering from the University of New Hampshire.

Eric Murray, Senior Vice President of Sales and Business Operations at Tantalus Systems Corp., has over 20 years of experience in positions responsible for global sales and business growth. Eric oversees Tantalus’ international business development efforts from his office in Raleigh, North Carolina.