The $400 billion energy utility market is undergoing significant changes resulting from rising energy prices, industry deregulation, pro-environmental trends and regulations and ever-increasing energy demand. These changes are forcing Public Utility Commissions and other regulatory agencies to place an unprecedented amount of scrutiny on electric and gas utility companies. In states like California, highly publicized brownouts have resulted in intense scrutiny of the utilities’ ability to maintain power service and quality.
Such pressure has resulted in legal mandates to accurately predict and control energy demand while minimizing the development of new, expensive and environmentally damaging power plants. Progressive states like Texas have deregulated electricity generation, enabling greater competition for electricity services and providing businesses and consumers a choice of energy providers. The result has been a flurry of activity among utilities, metering vendors and energy providers to define strategies and innovative approaches that will better control and manage energy demand while improving service quality and customer value.
Representing over 30 percent of annual power consumption worldwide, consumer energy demand is a focus for energy utility companies. However, no easy solution has appeared . . . until now. Utility industry initiatives such as Advanced Metering Infrastructures (AMI) combined with advances in Home Automation (HA) and Home Area Networks (HAN) are developing automated methods for notifying, modifying and managing residential energy demand. Success from these initiatives requires an unprecedented level of interaction between the energy provider and the residential customer.
The ability to more effectively predict and manage peak load periods presents compelling opportunities to dialogue with customers while delivering competitive and differentiating new energy management products and services.
Key Success Criteria for an Energy Management System
The ideal energy management system (EMS) needs to offer the following capabilities to utilities and consumers.
Open at the device level
The system must allow a consumer to walk into a retail outlet such as The Home Depot® and purchase a smart energy management device for the home that can be easily added into an energy management system offered by a utility company. Closed systems will ultimately lack price competitiveness and will not capitalize on white goods manufacturers’ desires to network their appliances.
Open at the enterprise software level
If utilities and regional energy providers (REPs) are to truly reap the benefits of residential EMS’s, the system needs to plug into existing back-office software such as meter data management (MDM), customer care, and billing systems. Any EMS system should support accepted and published enterprise software integration standards and methodologies.
Support for different consumer categories
Many utilities and REPs will need to accommodate consumers from different socio-economic levels and varying technological infrastructures. Early research suggests four consumer categories:
- Homes with no central HVAC
- Homes with central HVAC, but no thermostat
- Homes with central HVAC and thermostat, but no broadband
- Homes with central HVAC, thermostat and broadband
Rich consumer information access and usage modeling
Consumers have shown a willingness to pay for real-time, rich, detailed and personalized access to electricity information if it provides them with the ability to understand and manage their home energy consumption more effectively.
Support for multiple WAN technologies
Where use of the AMI system is possible, it should offer the lowest cost WAN technology. The EMS should also support broadband and GPRS / Pager technologies, where beneficial, as a means of communication between the energy provider’s infrastructure and the residence.
Sustain load modeling
At any time the EMS should be able to predict the likely effects that a given price change or Demand Response message will have on energy load.
Fault / fraud detection
Any useful EMS system must detect consumer fraud and/or system fault by comparing registered device and program information against real-time device behavior and electricity consumption information during and after price change or load control events.
Support for consumption benchmarking
Analysts and market surveys show that consumers will want to benchmark their energy consumption against their neighbors.
Reasonable cost
All of these needs must fall within a suitable business model that allows interested utilities a reasonable profit while providing consumers with the ability to reduce expenses through wise energy management.
Upgrade path for utilities, from legacy AMR infrastructure to AMI As the EMS grows, utilities will want to centralize more applications and infrastructures. The system architecture must support integration and upgrade of legacy systems.
Simple user self-installation For rapid adoption, the residential portion of the EMS needs to be easy to learn, easy to use and capable of quickly adding more smart devices to the network.
Compliance with the regulatory environment of each locale Every state and local utility is under specific regulatory requirements. For an EMS to be successful it must easily conform to different regulatory requirements.
Scalability that retains levels of demand response As the EMS system adds more consumers and capabilities, response time must increase proportionally to meet the every-increasing demands on the system.
