All I want for Xmas is ... smart grid?

By Steve Nguyen, Echelon

Up and down the UK and around the world, people are in the process of brightening up their homes in preparation for and celebration of Christmas. Trees will be erected, baubles hung, tinsel draped and lights turned on. The tradition will reach out beyond homes and into the high street as local authorities decoratively illuminate towns and cities for the duration of the holiday period.

This predictable flurry of activity in the UK is often accompanied by an unanticipated yet annually recurring seasonal flurry of snowfall. Followed very shortly (and very predictably) by a flurry of press and media stories about how local authorities should do more to maintain ice- and snow-free roads and pavements when the temperatures dip.

Little thought is given by the average taxpayer to the additional costs local authorities incur due to inclement weather. Poor management and bad planning are usually held up as the reasons for the snow chaos. Of course, should councils decide to redirect budget away from Christmas festivities and into salt and grit for the roads, it would have roughly the same PR effect as a parent telling their children that there would be no Christmas tree this year to cover the cost of a snow-blower for the driveway.

A survey of British householders by price comparison site GoCompare released on November 10, 2010, via the Energy Saving Trust revealed just how much energy is wasted on Christmas lighting. Of those surveyed just over half of respondents intended to display decorative Christmas lighting outside the house. GoCompare calculated that a display of 100 five-watt bulbs switched on for six hours a day over the festive period will consume 207 Kwh, the equivalent of 22.8 days of the average British household’s electricity consumption. If you think your electricity bill is going to be high, consider the cost of lighting up Oxford Street. Just think how many truckloads of salt and grit that would buy.

There are some out there who are seeking an end to Christmas lights. In fact, social media website Facebook has a group dedicated to that exact cause, though its members are driven by environmental concerns rather than financial worries. The fact that it has just 19 members probably highlights exactly how popular local authorities would be if the lights weren’t turned on. Which presents councils with a dilemma: they can’t quite afford to keep the lights on and they can’t really afford to turn the lights off.

Councils, of course, are highly prized customers of electricity suppliers. They will buy energy at suitably attractive wholesale rates and, like homeowners, they will switch supplier to find the best rates. Imagine then, if a supplier could streamline its own operations offering its customers much more favourable rates. Unfortunately, the price of generation is on the rise since the price of fuel keeps going up. Which presents suppliers with a challenge of their own.

Back in 2001, Enel — Italy’s dominant utility — started a five-year programme to install smart meters across its customer base of 30 million homes and businesses. The goal was to improve efficiency, create higher margins, reduce power theft and help customers reduce their energy bills. Enel created its smart grid using Echelon Corporation’s power line communications technology and data concentrators. The installed cost was €2.2 billion, but with an ROI of €500 million per year in operational savings, the project has long since paid for itself.

Almost 10 years later, we’ve now moved beyond two-way communications and remote meter reading towards the smart grid 2.0. The smart grid 2.0 puts intelligence and communications in devices throughout the grid from distribution equipment (meters, transformers, capacitor banks, etc.) to commercial electrical devices (chillers, boilers, air handlers, lighting, etc.) and home appliances like electric water heaters, air conditioners and rooftop solar arrays.

These smart devices can now become a part of the grid and interact in real-time to changing conditions on the grid. The smart grid 2.0 uses the grid network and the devices connected to it as a communicating, intelligent system for the delivery of additional services and increased operation efficiency, such as demand response programmes.

Consumers, distribution companies and retailers all benefit from smart metering. A smart grid can improve management of the transmission and distribution assets as well as their generation portfolio in order to keep pace with their customers’ increasing electricity usage and peak demand. For the supplier and retailer, it makes possible and accelerates the adoption of new services to enable them to create unique market propositions, and differentiate their offerings in increasingly competitive energy markets. All of these vast benefits to utilities also mean, of course, that the consumer wins.

Imagine a ghost of Christmas future in a UK where smart grids have been widely adopted. Homes and high streets could remain brightly lit at a fraction of the previous cost; and local authorities could afford to be better prepared for the inevitable snowfall. Everyone would benefit. Smart grids turn out to be the Christmas gift that keeps on giving, authorities would make year-round savings across the board, rather than going up, generation might even go down resulting in a healthy reduction in CO2. Smart grids are for life then and not just for Christmas!

Editor’s note: This is a guest commentary by Steve Nguyen, director of corporate marketing for Echelon Corporation, which provides platforms and products for smart-energy networks communications.