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Smart Grid

Here are some notes on an episode Power Play of the BBC Radio 4’s In Business programme presented by Peter Day first broadcast in the UK on 5 August 2010, largely repeated as a World Service Global Business episode on 21 September, which I caught on podcast. It should be available in the archive of past episodes.

It attempted to answer two questions, what is the Smart Grid, and what difference will it make? It also looked more specifically at the impact of smart meters, as a first step.

It focussed in particular on the UK where the Government has told electricity suppliers to fit smart meters by 2020 (which will mean 47 million new meters in 24 million properties). Experts claim meters will provide much more control of energy use and reduce carbon emissions. It also looked at the benefits the smart grid would bring, and in particular whether it would help address the predicted shortfall in UK electricity provision from about 2015.

The programme included several short interviews

  • Petter Allison, Director for Smart Metering, British Gas

  • Nick Winser, Director of Transmission, National Grid

  • Andy White, President and CEO, Trilliant

  • Jeremy Rifkin, President, Foundation on Economic Trends

  • Robbert van Leeuwen, Chairman of Utrechtestraat’s entrepreneur group, Amsterdam (In Business episode only)

  • Dimar Annen, Consultant, Accenture (In Business episode only)

  • Jon Arnold, Worldwide MD for Power and Utilities, Microsoft

  • Pilgrim Beart, founder of AlertMe

Smart Meters

The interview with Allison made it clear that there are bigger incentives for the supplier than the consumer. Smart meters would eliminate estimated bills – a significant cost to the supplier. More significantly the supplier will be able to introduce Time of Use pricing, permitting them to translate half hour wholesale prices into the retail market. For the domestic consumer it will mean a much more expensive peak energy tariffs, offset by cheaper low peak. The customer will either have to work out how best to take advantage of this, e.g. instructing the dishwasher to come on when the price is below a certain level, or rely on the supplier to do it for them, which sounds invasive.

Arnold’s view was that if you don’t make it easy for customers, they won’t do anything, as they are mostly too busy to spend any time looking at graphs and visual displays. An online wizard is needed to guide you through how you want to run your house, with maybe a weekly email giving advice on how to improve consumption.

Beart’s approach is the opposite. His in-the-home kit sends data to the user’s mobile or their own site, accessible anywhere, showing you exactly where you’re spending your money on energy. His view was that the difference between his product and a smart meter is that it is for the consumer’s benefit whereas a meter benefits the producer. But AlertMe relies on the individual to interpret the data (there might be a lot of it) and act on it themselves.

Smart Grid

Winser didn’t view the UK’s future energy provision with huge alarm, but observed that with lots of renewable or low carbon sources coming on line, and many microproducers (e.g. people’s homes), the grid will need to be “dramatically smarter than today”. White suggested that the dramatically improved two-way communications offered by the smart grid can’t resolve the shortfall but can improve efficiency and smoothing so the overall amount of extra energy needed can be less. Setting up the grid would also need a lot of investment, but he thought the payback would be seen in less than five years.

The greatest claims for the grid were made by Rifkin, who said that we are “on the cusp of a third industrial revolution, a new convergence of communications and energy which could change the world in a very fundamental way.” He saw it as analogous to the railways and roads to the first and second industrial revolutions. This third revolution has four pillars: renewable energies, converting every building in the EU to become its own energy plant, improved Hydrogen storage, and the smart grid to distribute it. On being pressed by Peter Day that it was very expensive, Rifkin argued that it should be seen as economic development investment. Cities spend economic development funds already; rather just than shoring up the second industrial revolution model, they should use 3% of that money on the new energy model instead.

Thoughts

There are a lot of big claims made by some of the proponents about the long term benefits of the grid, without being obvious how easily they are achievable. Claims for smart meters seem overblown. A user interviewed at the beginning claimed he was seeking a 7-10% reduction (but was it realised?) I wonder how much difference it will really make in practice. After all as Peter Day said, if I want to boil a kettle, I want to boil it, and seeing a red light on a smart meter isn’t going to make a lot of difference. If there’s going to be much difference it will because smart appliances know when to switch themselves on, which must be further down the line. Unless fuel becomes hugely more expensive, I can’t see most people bothering – after all recent steep rises in petrol prices haven’t persuaded people to switch to public transport to save money.

But it is coming, and there will be lots of work for us in IT!

More

David Bicknell, Getting Smart on Smart Metering, Green Tech, 5/10/2010

A contrary view: BBC News article: Smart meters ‘may not cut energy use’, 13/09/2010

A recent (7/10/2010) news article in Business Green reporting two of the companies interviewed (British Gas and AlertMe) coming together, and also an honourable mention for my employer

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