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Sectors from banking to government have used the web to serve customers and touch stakeholders in a new way.
While many utilities have started to make significant investments in their web presence, they have only just begun to leverage the power of the Internet in their businesses. The deployment of Smart Grid infrastructure such as two-way networks, smart metering and data warehousing will provide the necessary foundation and information to deliver a compelling suite of online experiences for consumers, helping them to understand and manage their energy usage in ways never before possible.
Consumers will enjoy tremendous benefits from using a web interface to monitor their energy usage. For starters, a simple portal can provide basic information regarding energy usage, enabling consumers to understand their usage patterns, and make smart choices about efficiency and consumption. A web site can also provide users with tools to make informed decisions about when to use electricity at different times of the day -- based on their own needs, when peak hours have passed, and so on. A web-based product tracks home performance in near-real time to identifying opportunities for savings and making choices simple for the user. It gives users the tools to save money on energy bills and makes homes more comfortable and provides remote control of smart appliances and home heating and cooling systems.
A web-based system gives utilities an advantage as well. They can influence when consumers use electricity to reduce their peak generation costs, base load usage, and may even be able to reduce their customer service costs by providing customers with better information. Utilities will also need to manage the loads created by new product categories, such as electric vehicles connecting to the grid. Having a tool to educate consumers and support energy efficient programs will be a key asset, and a web interface is a cost effective answer.
The web represents a potential quantum leap in the way that utilities interact with their customers. The web provides the ability for an extraordinarily comprehensive exchange of information on an exceptionally cost-effective basis. A successful utility will leverage the data collected from smart meters and deliver it via the web to educate customers on their individual energy usage patterns and offer custom-tailored programs and services to shape the utility's load profile and improve bottom line performance.
The web will be instrumental in providing near-real-time feedback on energy usage, an unlimited history of household usage, and comparisons of current usage patterns to historical ones; as well as relevant comparisons to similar homes or businesses, and rules-based control of smart thermostats and other products and appliances in the home. Internet technologies can provide these capabilities and many others, some of which have not yet even been conceived of, to improve overall efficiency, reduce peak demand and improve customer satisfaction.
In a three-year California pilot involving 2,500 utility customers, energy usage information -- combined with time-of-use rate structures -- enabled these customers to reduce peak demand in the summer months by 13% on average. Customers who combined these capabilities with smart thermostats were able to reduce peak demand by more than twice as much, or 23%. (Ref. 1) A web-based portal can be used to provide both the feedback component and the remote control of the thermostat providing an interface to computers and mobile devices alike.
Many utilities have been considering the deployment of in-home hardware displays to educate customers on their energy usage patterns. But as currently conceived, most of these products only provide feedback on current energy usage and do not provide any of the more advanced functionalities mentioned above. They also tend to be more expensive to deploy and to maintain than a web-based solution, and once installed, are difficult to upgrade and improve over time. And while they do provide some value for homes not connected to the Internet, successful utilities will be looking to more capable and flexible solutions for the increasing number of web-enabled homes.
Current U.S. household penetration rates for the Internet are approximately 75%, with broadband connectivity making up the lion's share at 66%. (Ref. 2) This represents a significant opportunity for utilities to target Smart Grid services directly to their customer base. Using the Internet not only has an absolute cost advantage when delivering utility programs and services, it has the potential for enhancing the value of these products and services by allowing utilities to promote them directly to the customers who need them most. This will empower consumers to make better choices, and enable utilities to personalize those products and services to their specific, individual needs.
Looking to the banking sector as an example, it has been demonstrated that the cost of the average live service inquiry is $7.50, compared to a cost of $2.50 when the inquiry is handled by email and $0.65 when the inquiry is handled through a web-based self-service interface. Most importantly, the quality of the web interface service is better from the consumer's perspective. (Ref. 3)
By leveraging web technologies, utilities can achieve similar kinds of savings when providing real-time feedback, signing up customers for new tariff programs, acting upon demand response capabilities, and providing energy efficiency upgrades.
Utilities need not develop and deploy these sophisticated capabilities in-house, as many web-savvy companies are already positioning their product offerings to fill this need. Solutions can be deployed either as stand-alone web sites, minimizing the impact on maxed-out IT departments, or as an integrated product with existing web properties.
The utilities that correctly leverage the Internet will be rewarded with greater profitability and customer satisfaction -- to a degree that isn't thought possible today. And along the way, these tech-savvy companies will transform the utility industry in the same way the leaders in other industries have transformed theirs.
References
1. The Brattle Group, "The Power of Five Percent", May 16, 2007.
2. Pew Internet and American Life Project, February 13, 2008.
3. Online Banking Report, April, 2004.
For information on purchasing reprints of this article, contact Tim Tobeck ttobeck@energycentral.com. Copyright 2010 CyberTech, Inc.
This article is good at detailing all the potential advantages of utility companies engaging customers with two-way communications. The internet is indeed a highly useful means of communicating between Smart Grid services and the utility company and customers. Personal computers may very well be readily available to communicate with in a majority of homes, but demand response technologies or real-time energy displays are not available in the majority of homes, let alone be connected to the web. The latter pieces of hardware must ALSO be communicated with, even if it's through the web and a home PC.
The underlying problem for the utility industry is how to fund the equipment consumers must deploy in their homes, and fund the support systems tied to their Smart Grid that must interact with them. It is a massive expense to equip a large portion of consumers that the utility industry cannot afford without massive rate increases to pay for it.
I suggest the only way utility companies can afford it on a large scale is by regulators allowing them to change their business models. Utilities could commercialize the in-home equipment and software consumers would need, such that consumers who want it pay directly for it, and those who don't want it are not burdened by rate increases. This is very much like a CATV or telephone company does when they sell interested customers optional services and also sell the equipment to use them e.g. call displays, modems, or cable boxes.
Len Gould 12.1.08
The article, I think, implies use of customer's existing personal computer equipment as the customer's interface to their meter, via a long circuitous and no doubt significantly delayed data route. Most homes will wind up increasing their electricity consumption and bills if it is necessary to implement a full-time-on personal computer to carry out the needed customer interactions. The ideal system has the required intelligence for the customer site embedded as a minor additional bit of functionallity in the customer's meters, with optional interfaces / displays rarely on but smart enough to know when and where "on" is required.
Ya gotta think that whole thing through again.
Bob Amorosi 12.1.08
Len is correct, the web will only be efficient and economical for non-real-time functions, like it is used currently by many utility companies for billing at the end of monthly billing periods.
There have been some technology trials underway that use the web for real-time transactions for demand response and real-time pricing, with sophisticated PC-based human interface software. Milton Hydro in Ontario has been experimenting with this sort of thing in the town of Milton, Ontario for some time in collaboration with third-party technology providers like Bell Canada and Trilliant Networks. But the cost for these systems are several hundred dollars per customer which is very large compared to the cost of an AMI system based on smart meters equipped with a communications radio link and software into a customer's home.
Jack Ellis 12.9.08
I think we need to take a step even further back than Len and Bob suggest. By any measure electricity in most of the US is pretty cheap. Therefore, with the exception of space conditioning, it may not be terribly cost-effective for most residential consumers to bother with demand response or energy efficiency. If it is, then perhaps the first step is to provide them with information that helps sort out what is and is not worth doing.
While I'm not a fan of regulation, I have begun to appreciate the value of energy efficiency standards in residential construction and for appliances. I think they will have a bigger impact at lower cost than any of the interesting but likely impractical ideas for home gateways and remote control of end-use devices. Most consumers are uninterested in the relatively meager savings they would realize by actively turning appliances off and on again, especially if the impact is less than, say $10 per month.
It would be nice, of course, if consumers did what I'm doing instead of doing what I just described. We're building a home in snow country that will have high-efficiency in-floor heating, as much insulation as we can stuff in 2x6 walls, 11 inches of insulation between the interior and exterior roof decks, high-performance windows with insulating interior shades and external awnings where there is intense summer sun exposure, extra effort during construction to seal air leaks, a wood burning stove for the main living area, connections for electric vehicle charging in the garage, and connections on the roof for solar electricity and hot water that we hope to install at a later date, and a parallel electric meter that we can read from inside. That's in addition to the other requirements of California's Title 24.
Don Pfau 12.9.08
The interface can be much more interactive and serve multiple purposes. I am reading Thomas Friedman's latest, "Hot, Flat, and Crowded". Pertinent to this discussion, please take a look at pages 228-240, where he speculates on the possibilities.
F.Allen Morgan 12.10.08
Why not offer 'wifi' meters? The meter would present a web page (and historical usage) and other meter real time information and connect to the home owners local wifi network. This could be provided as a extra cost, or for free if the homeowner allowed the meter to email its meter read information to the utility on a daily basis. I recently purchased a 'wifi ready camera with with server' for only $50. It took me less than 10 minutes to hook up and start to get pictures of my backyard...all I had to do was make it join my home network. There are many new home automation systems that are begining to appear that work off of the internet protocal to send the necessary commands to turn on/off lights, motors, heating/ac, etc. Rather than develope a custom/secure/proprietary network use the public defacto home network(but with appropriate safeguards). Its evident that the ip network is going to become ubiquitous, any holes could be filled up with repeaters provided by the utility as necessary (for the public good), etc
Bob Amorosi 12.11.08
Jack Ellis,
I agree that consumers would be disinterested in implementing demand responses with heavily automated in-home systems connected by gateways to the meter if their savings are small. But the point is that the growing demand-supply disconnect in many areas of the US, plus the world's peak oil crisis and the looming emergence of plug-in hybrid electric vehicles, plus the transition to Time-Of-Use electricity billing through the adoption of advanced metering systems, all will in time lead to an electricity rate crisis. That small savings you refer to now will surely balloon to perhaps 4 or 5 times as much, because I suggest the days of electricity being a consumer bargain are numbered.
Bob Amorosi 12.11.08
F.Allen Morgan,
WiFi meters are certainly possible, and indeed some meter manufacturers are developing or offering it already as a meter-to-home communications option. The problem however with WiFi over other wireless communications is that most utility companies prefer a solution for ALL their customers, since not everyone has a personal computer in their home yet, and many among those that do have one do not have a WiFi network installed.
WiFi is also not well suited as a communications design for the in-home applications we're talking about here - where very intermittent, low bandwidth data rates, low quiescent power dissipation transceivers, and low cost are typically required. WiFi is better suited for higher bandwidth conventional local area computer networks. Security of WiFi is another worry for utility companies. Just ask them how easy it is for hackers to tap into a home owner’s WiFi system from a neighbor's house or a car driving up the street nearby. Zigbee and other RF wireless standards including power-line carriers are much more suitable.
Tom Blanford 12.18.08
In my case the meter is fully 300+ feet from one house and 150 feet from another. Scratch Zigbee. I would vote for multiple connection methods such as wired ethernet, LonWorks, HomePlug etc. The thing I don't like about wireless is the technology is always changing especially for encrypted links. I would also vote for operating system agnostic software methods. I don't use Windows or MACS. Browsers are getting more capable all the time and many are fully cross platform compatible and operate identically. Someone also needs to also think about multiple installations of submetering like for electric vehicle recharge. Just my 2 cents.
