Subodh Nayar is the Chief Operations Officer of Powerline Telco
Empowering consumers with actionable intelligence about their power will not be the outcome of the deployment of smart meters. Rather, it will be exactly what the utilities intend for it to be: a cost-effective way to implement real-time pricing, demand side management and distribution system monitoring.
Why? The buyer and seller of electricity have opposite power consumption interests. We (buyers) want to have control over the total power we consume and independent confirmation we are getting what we pay for. Electric utilities (sellers) seek to maximize the profits from a business model that requires them to generate, transport and deliver a consistent quality of power — regardless of demand — in exchange for a guaranteed rate of return.
Electricity generated on the power grid isn’t stored, so the grid is engineered and operated to meet peak levels of demand, which might only exist for a few hours per month. Without control over demand, responding to demand spikes will cause the quality of power supplied to fluctuate outside accepted norms, i.e., delivered voltage lags outside the 5 percent acceptable quality band, or frequency fluctuates outside its 2 percent quality band. That can only change if demand can be controlled, so utilities want three things from smart meters:
- To protect their return on investment (ROI) by not reducing the total amount of electricity sold.
- To free up supply reserved for unpredicted variations in peak demand with direct load control. (If the utility was granted direct control over devices with the highest amperage — the air conditioner (40 amps) and the hot water heater (30 amps) — it could shed 70 percent of the average consumer load, temporarily reducing consumption.)
- To reshape the demand curve, shifting demand from the peak busy hours to when demand can be met with baseload power (peak load shaving).
Metering has never been intended to reduce overall consumption.
A smart meter could report on whole house electricity usage, but it could not report on the demand from individual household devices. To make intelligent decisions about energy use, measurement should take place at the outlet, in the device or even on the power cable connecting the device to the outlet. This information can also track the quality of the power being delivered, which can affect the life of the device. Current, temperature and time data could be collected inexpensively, using existing technology, and transmitted over an Internet connection to one of the many service providers with a business intelligence platform. This data can be mined to reveal power quality issues that affect consumption. For example, a low voltage reading will tell you that the device will need to draw more current, increasing the total power cost for that device. Or if your dishwasher were drawing a current for longer than similar appliances, that could alert consumers that a maintenance check is in order.
While price signals, along with consumer education, might have an effect on total demand, they could also have an unintended consequence: If a drop in the price per kilowatt-hour becomes the key indicator of when to run the dishwasher, hot water heater and washing machine, then using it may actually increase total carbon emissions because the cheapest electricity today is mostly from coal. By using more electricity when it’s cheapest, we’ll burn more coal.
There is little doubt that smart metering will meet the utilities’ needs, and perhaps facilitate whole house measurement for the buyer. But direct device monitoring is a simple, inexpensive way to effect a shift from a grid blind to demand and engineered to meet peak demand to smart customers who can manage the way their power is delivered.