Are Smarter Meters Smarter Readers? The Evolution of the Meter and the Smart Grid within the United States
Itron – a smart meter company – is taking the next step to evolve the Smart Grid into an “Active” grid. Will Itron succeed?
Wait, what is a Smart Grid?
In 2007, Title XIII of the Energy Independence and Security Act was enacted within the United States (US) – an act that set forth the modernization of the nation’s electricity transmission and distribution systems. [1] The Smart Grid (SG) is part of the national effort to modernize the existing electric grid, which was built in the 1890s within the US. The current electric grid contains 9,200 electric generating units that can generate 1 million megawatts of energy and is connected to over 300,000 miles of transmission lines. [2]
Why can’t the current grid handle the increased demand the US is placing on it? Well, society has evolved in many ways.
From mobile technology to electric vehicles, the amount of energy the US is demanding in the 21st century has surpassed the capacity the current grid can offer in an effective and efficient manner. Thus, the US needs a smarter grid – a grid that can utilize the internet to allow two-way communication between utility providers and consumers. The communication channels will ensure the supply of energy can meet consumer demand, especially during events that cause a disruption in the distribution network as seen in the video below. [3]
Okay, and what is this I hear about Smart Meters?
The SG is supported by various components. One of the foundational components is the smart meter, which is an innovation of the traditional electricity meter. The smart meter is connected to the internet, enabling two-way communication and data transmission between utility companies and customers. Equally important, smart meters bring a plethora of other benefits such as: giving homeowners control of energy usage, curbing energy usage within the home, saving money through time-of-use rates (e.g., off and on-peak rates), creating efficient electricity transmission, and supporting a platform for the “smart” home. [4] It is important to note that smart meters are not limited to the electric grid. Smart meters also exist for gas and water utilities – each an area that Itron specializes in.
Itron’s Model and Their Role in the Active Grid
Itron is a global company that supplies electric, water, and gas smart meters to 8,000 customers across 100 countries. [5] Additionally, Itron provides services to help collect, analyze, and manage the data that is collected from their smart meters.
Itron recognized the SG was not ambitious enough to meet the growing energy demands of consumers. As a result, the company introduced its OpenWay Riva (OWR) platform that leverages the Internet of Things in early 2016 to empower the electric grid to make decisions and to respond to changing conditions in real-time. [6] OWR forms the foundation for what Itron has championed as the Active Grid (AG). The AG also leverages machine-to-machine communications, multi-application network architecture, cloud computing, data analytics, and a new generation of battery-powered edge devices and sensors that help drive real-time decisions that impact the distribution network. [7] Furthermore, the AG will help create “local power pools” that help distribute energy and eliminate the risk of wasting energy through communication, collaboration, and coordination in real-time. [7] Itron’s efforts to transform the SG into an AG are in the early stages, but Itron also understands that it must strategically partner with other organizations to form the distribution ecosystem of the future. The video below provides further details and benefits about the AG. [8]
The Future at Itron: Suggested Considerations and Next Steps
As Itron leverages the technological shifts that are occurring to make the AG a near-term reality and the SG “historical”, it must address the areas of concern noted below.
- Secure Buy-in from Energy Utility Companies: The early adoption of Smart Meters – a necessary component of the SG and AG – was fueled by American Recovery and Reinvestment Act of 2009 that provided the Department of energy with $4.5 billion dollars to modernize the electric power grid. [9] Now that the funds have been distributed and used, Itron must consider what financial barriers this will create for the Utility Companies’ willingness to implement the technology Itron needs to pursue an AG.
- Engage Federal and Local Governments Immediately: Per Itron’s 2016 Resourcefulness Index, 53% of utility executives said government regulation delays investment and 71% of consumers recognize that new – or potentially new- government regulations are concern. [10] Hence, Itron must determine how it can work closely with utility companies to help navigate and expedite the lengthy government regulations.
- Create a Secure AG: 75% of consumers are concerned about data privacy and 71% are worried about cybersecurity attacks on utility systems. [10] Itron must continue to develop technologies that enable and enhance cybersecurity features among the AG to protect consumer information.
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Sources:
[1] Energy.Gov, “ Title XIII – Statement of Policy on Modernization of Electricity Grid”, http://energy.gov/oe/downloads/title-xiii-smart-grid-sec-1301-1308-statement-policy-modernization-electricity-grid, accessed November 2016.
[2] Smart Grid.Gov, “What is the Smart Grid?”, https://www.smartgrid.gov/the_smart_grid/smart_grid.html, accessed November 2016.
[3] U.S. Department of Energy, “What is the Smart Grid?”, YouTube, Published June 4, 2013, https://youtu.be/JwRTpWZReJk, accessed November 2016.
[4] Hoiland, Joel, “Smart Meters Equal Cost Savings,” Transmission and Distribution World, August 2011,63,8, pg.20, ABI/INFORM via ProQuest, accessed November 2016.
[5] Itron, Q3 2016 Investor Presentation, p.6, http://investors.itron.com/common/download/download.cfm?companyid=ITRI&fileid=916631&filekey=83837093-6D85-4E96-B689-755674BE10DA&filename=Itron_Investor_Presentation_-_November_2016.pdf, accessed November 2016.
[6] Itron, Wolf, Tim, “Putting Smart in the Right Place”, https://www.itron.com/na/-/media/itron/documents/openway-riva-white-paper.pdf?la=en-US, accessed November 2016.
[7] Itron, “Welcome to the Active Grid”, https://www.itron.com/na/-/media/itron/documents/welcome-to-the-active-grid-web.pdf?la=en-US, accessed November 2016.
[8] Itron, “Welcome to the Active Grid”, YouTube, Published June 24, 2016, https://youtu.be/u4CkiqTFCYw, accessed November 2016.
[9] Energy. Gov, “Recovery Act: Smart Grid Investment (SGIG) Program”, http://energy.gov/oe/information-center/recovery-act-smart-grid-investment-grant-sgig-program, accessed November 2016.
[10] Itron, “2016 Resourcefulness Index”, https://www.itron.com/na/about/resourcefulness#, accessed November 2016.
The smart grid and active grid are tremendous opportunities to address our two major issues the U.S. faces 1) climate change, and 2) outdated infrastructure. While on paper, these ideas seem like clear wins for utilities and consumers, the massive investment and change required to integrate these into our current electric infrastructure is daunting. First there is the simple issue of internet connectivity. For consumers to use the smart or active grid, they need to an internet connection and wireless within their home. Internet connectivity and wireless networks are common in American homes, but for some, an internet connection would be an additional expense and complexity. Second, American’s may have to make compromises to their exiting lifestyle. Performing energy intensive tasks overnight or delaying other energy intensive tasks may be too high of a price for many to pay.
The author mentions three concerns and next steps 1) secure buy in from energy utility companies 2) Engage federal and local governments, and 3) Create a secure active grid. Of the three, my biggest concern is securing buy in from energy utility companies. They have invested trillions of dollars into the existing system and made steady, government approved profits on these investments. To ask them to invest in technologies that could eventually put them out of business or significantly lower their profits seems like a very large hurdle. Ultimately, it may up to the average citizen to force the system to change.
Really interesting post, about an application of digital technology that I hadn’t really heard much about. Of the three concerns mentioned, the one that really jumps out to me is the security issue. The stakes are pretty high when we’re talking about access to a basic need like electricity which many take for granted, and I can understand why the idea that utility systems could be opened up to attack would concern 71% of consumers. Hopefully this is something that Itron can mitigate, but I think the security standards will need to be especially high in this context, given the stakes.
Thanks for writing this article – I think the digitization of the grid is one of the most important transformations that all countries need to go through to not only improve operational efficiency, but to be able to better understand and keep up with demand as well as be able to deal with consumers adding renewables (like solar panels from Solar City) or batteries (like the PowerWall from Tesla).
I see the trend is to replace older meters is under way, despite slow moving regulatory bodies, so my questions would be “What’s Next”? Should they go into a software play to use or control the data from their meters or partner with an existing software player? Would they be transitioning to an operations business where they are mainly servicing and maintaining local meters while moving installation efforts to developing countries? Could they be a service provide that provides consulting services based on what the data is showing utilities and give recommendations on investments and improvements?