Focus on the customer.

Connecting generation supply, demand and customers through Smart Grid

Smart grid technology is a bridge that connects generation supply, demand and customers. The utility industry is a customer business, but its customers are not at all ready or aware of what is about to hit them. To make it work, we need to know what customers are going to do. What do they want? What could they want if they knew it could happen?

For those of us who work in the utility industry, smart grid technologies, and in-home control devices are cool. We can envision ways to interact with technology. We can imagine getting message alerts on our cell phones when there’s a demand change and responding to that signal. This level of interaction may be appealing to some segments of customers, but not the majority. For most people the technology needs to be simple and fun. It needs to be more like an X-box game or Wii system.

Customer issues to resolve

To bridge the connection between customers and generation, three key issues need to be addressed:

Standards and protocols– Standards and protocols for communications and devices need to be defined and they need to be global. Appliance and energy management systems manufacturers will not be able to design products for each market in the world. There needs to be a global standard. It needs to be driven by product companies such as Whirlpool, Microsoft, Google and other appliance and technology companies in combination with utilities.
Customer adoption and use of technology– The systems and control in consumers’ homes and places of business need to be simple and fun. Customers need to be able to see the value of using it.
Data management and security– Data management and security of data has to be worked out and proven. There are already data security technologies that can be leveraged for the utility industry and the NERC CIP provides guidance for implementing those systems. Data security is a concern for many consumers, and for regulators looking at smart grid business cases. There are proven technologies that can be leveraged to manage data security – some have already been used to automate data for medical systems which have much stricter privacy requirements.

Pilot tests will be the best way to test and improve the system to respond to the three issues. Utilities need to focus on a narrow range of ways to interact with customers and test and improve those technologies and processes.

Managing customers in a Smart Grid environment

The customer call center is going to need special attention, planning and training to help utilities successfully deploy smart grid technologies. The customer may call the utility about smart appliances or smart vehicles connected to the home network. Call centers will need information portals to respond to and direct these customer inquiries.

There are some concerns that the deployment of smart grid technology will inundate utility call centers with questions about all the connected appliances. But product branding will help consumers differentiate products and direct their calls and questions to the branded product manufacturer. The utility may need to provide some modifications to call center management to help direct these calls.

There are already some technologies being deployed to improve communications and provide notification of restoration. This technology can also communicate with regulators. There is a big learning curve in managing the call center, but there are many vendors already focused on making it work for the customer and enhancing the experience.

How we interact with consumers not only has to be simple and fun, but also has to be transparent and put the consumer in control. Consumers want to make responsible environmental choices, and we have to educate them about how they can do that and make it easy.

For instance, a control system might be a light in the home that turns red when prices are high and green when they are low, and has a button that lets consumers override the red light warning and use energy anyway if they choose to. This will be the kind of interface most consumers choose and it illustrates consumer control technology at one end of the spectrum. At the other end, there are consumers who will be willing to program their energy profile through a web interface. The key to any communications and control tools is to make the consumer aware of their energy use and most will make a choice to reduce energy.

An example of a technology that might help us imagine the ways we can use smart grid technology to add value to consumers lives, is OnStar, the intelligent safety, navigation and communications system that is an option in GM cars. It not only allows the car to communicate with an OnStar network, and send you emails about the automobile’s status, but keeps track of when you drive and how much and triggers letters offering lower insurance offers based on your actual driving habits. Once information is available through smart grid technology, there will be many opportunities to enhance value for utility consumers in the same way OnStar has added value for automobile drivers.

Customers Issues

Large customers, like the Navy, which spends about $1 billion/year on utility bills, see smart grid as a way to better allocate utility costs and provide incentives to energy users and building occupants to manage energy. At present, energy at Navy bases is allocated based on algorithms, and it is difficult to manage and reduce energy without better information. The Navy smart grid initiative will involve 20,000 meters at 40,000 facilities across countries, time zones and different frequencies. All meters will be part of a corporate network solution.

To meet this challenge, the Navy has collaborated with Google to install Google Earth on Navy servers and to use Google Power Meter in a smart grid demonstration project with solar PV, energy storage, and supervisory control and data acquisition (SCADA) integration.

The Navy is also partnering with utilities to participate in demand response pilots and programs and share lessons learned about AMI that could be instructive to other large corporations and government entities.

These demonstration projects and the deployment of smart grids for all Navy facilities will enable building occupants to reduce their bills and help the Navy as a whole, provide more accurate billing and accounting of energy costs and responsibility.

Smart Appliances and Standards

Whirlpool has already committed to make appliances smart grid enabled or smart grid compatible by 2015. The challenge is placing connectors in each appliance that work for the customer. To this end, the key is getting standards in place so the products can be deployed globally. Each appliance will need to respond differently to a demand event and be connected to an integrated system that triggers a response. Whirlpool appliances will be capable of being networked within a Whirlpool Integrated Service Environment (WISE) or an intelligent network controller. The utility will manage these networks in aggregate and be able to provide additional value to consumers.

The need to establish a global standard for home appliances and interfaces was emphasized by panelists and participants. It might need to be driven by product companies such Whirlpool, Microsoft, Google and other appliance and technology companies. The industry does not have time to wait for committees to make decisions and come to a consensus as the manufacturers for the products that will make smart grid technology valuable to customers have to make product decisions now.

Once the standards and protocols are established, it will be easier, not only for individual consumers to make smarter energy decisions, but also to make buildings smart and integrate them into the grid.

Regarding questions on whether the meter should be on the appliance, it is technically possible to put a meter anywhere. However, it may be cost prohibitive, and as one panelist quipped that might be a “fridge too far.”

About the Utility of the Future conference

KEMA’s 2^nd annual Utility of the Future executive conference was held June 18 – 19, 2009 in Washington DC.

For information on the panel participants and keynote speakers, download the conference summary Whitepaper, “Utility of the Future: Navigating energy sustainability.”

Thoughts, comments or insights? Join the KEMA Utility of the Future conversation.