March 2009 Archives

Being one who prefers hard facts over conjecture any day of the week, I decided to check out the impact of yesterday's Earth Hour on actual aggregate electricity demand at the wholesale level. PJM Interconnection, the grid operator for most of the mid-Atlantic U.S., provides guest access to wholesale data for their operating area. This data should be representative of the U.S. as a whole.

I took a screenshot of the PJM load graph, shown below.

My initial reaction is that overall demand during Earth Hour trended just like it would on any other Saturday evening; it dropped off gradually as households wound down and went to sleep. Consumption during Earth Hour actually tracked above PJM's day-ahead and hourly forecasts.

It would be nice to see the data from last Saturday for comparison purposes. I'm still looking for that.

As a publicity and awareness event, Earth Hour was in many ways a success. Props to the organizers for that. But on the question of whether Americans will actually reduce energy demand when asked, Earth Hour demonstrated that it takes more than good intentions to measurably alter our behavior.

The conventional thinking in smart grid and advanced metering infrastructure (AMI) circles envisions a two-way communications network between utilities and consumers carrying energy consumption, dynamic pricing, and load shed signals between consumers' smart meters and utilities' central control systems. Unfortunately for rural energy consumers, including many of America's farmers and ranchers, this vision will not become reality for a long, long while. Where neither WiMAX nor traditional cellular data networks provide wireless data coverage, no affordable, technically feasible, real-time, two-way data communication link alternative exists (that is, without commandeering the consumer's phone line). Without a real-time two-way link, smart metering, as currently envisioned, cannot be deployed to rural America.

In Boulder, America's first "smart grid" city, Xcel Energy has made a substantial investment not just in new smart meters, but also in the costly broadband infrastructure necessary to read them:

Minneapolis-based Xcel, Colorado's largest electric utility, has installed about 14,000 "smart" meters that provide information to the utility and to customers. Xcel and its contractors have strung more than 100 miles of [fiber-optic] cable over power lines for broadband transmission and hooked up a handful of homes to program and monitor energy use.

From the Associated Press, via Minneapolis/St.Paul's WCCO.com

You can see a map of Xcel Energy's Boulder urban Smart Grid here.

It may not be obvious, but the only immediate way to economically justify a fiber-optic backbone deployment of the type Xcel is using in Boulder (beyond R&D) is to re-use that same fiber backbone to compete with incumbent DSL and Cable operators (e.g. Qwest and Comcast) in the commodity-grade residential broadband marketplace. That's a messy prospect with all sorts of political favoritism and anti-trust implications, especially with money in the ARRA (a.k.a. the Federal Stimulus Bill) specifically earmarked for broadband deployment. Giving both smart grid and broadband funds, amounting to some billions of dollars (see footnote), directly to utility companies is just too much concentration of monopoly power for most Americans to feel comfortable. As a result, I think it's unlikely that rural utilities will get federal funding for both smart grid trials and broadband programs.

As an alternative to an expensive fiber-optic rural grid overlay, rural utilities could potentially turn to the two-way capabilities of third-party wireless data networks like SMS, GPRS, CDMA, or WiMAX. (Another alternative, broadband-over-powerline (BPL), is too expensive for rural grids.) Smart meters are already being designed to use these technologies, and big names like GE and Intel are backing them. However, each of these technologies faces problems that make them unsuitable for rural deployment. I believe that WiMAX is too expensive for the coverage area required by rural deployments. GSM, GPRS, CDMA Data, or SMS coverage may be available in some rural areas, but a quick glance at the AT&T Wireless and Sprint Nextel coverage maps quickly shows that many rural areas lack basic cellular data services. Filling in these gaps would be both costly and unprofitable; that's why it hasn't been done yet. Consumers in areas without cellular coverage would similarly be without the benefit of smart grid electricity, resulting in less efficient usage of electricity there and higher over-all energy costs.

Smart metering and demand response systems will reduce costs for urban utilities and urban consumers through efficient load management. Using dynamic pricing and demand response capabilities, they will be able to avoid buying excessive amounts of bulk power at high prices during peak demand periods. Meanwhile, rural electric cooperatives will still be forced to buy bulk electricity at market rates, even when critical peak pricing is in effect. Rural power consumers will pay more and will lack the tools to change the situation. Eventually, while urban air conditioners, pool pumps, and car chargers are automatically cycling off during peak pricing periods, rural utilities may be forced to implement rolling blackouts in order to be able to break even on operating costs while maintaining regulated energy pricing structures.

This rural-urban disparity can be resolved through better solution architecture of smart grid systems. At the most basic level, demand response and dynamic pricing can be implemented without real-time two-way communication between the utility and the consumer. Consumption data can be stored at the consumer's location, in a smart meter, home automation controller, or personal computer system, and periodically forwarded to the utility using mobile or even handheld automated meter reading (AMR) technologies. More frequent, but less trustworthy, complementary updates can be sent by the consumer's in-home energy monitoring system via dial-up Internet access, satellite broadband, or other available consumer-controlled IP broadband technology. This store-and-forward approach eliminates the need for real-time two-way data communications while still providing the benefits of sophisticated time-of-use (TOU) pricing schedules.

Rural consumers can receive dynamic pricing information a number of ways, whether it be over a one-way paging network or through traditional AM broadcast radio (e.g. a rural radio announcer reads "the price for April pork bellies on the Chicago Mercantile Exchange is up five dollars to $80.56 today, meanwhile the Lake Wobegotten Rural Power Co-op will charge 28 cents per kilowatt-hour, triple the normal rate, for residential and farm electricity from 4:00 p.m. to 6:00 p.m. today due to excessive forecasted demand on the wholesale market." This may seem a rudimentary solution, but this is the kind of no-nonsense, keep-it-short-and-simple (KISS) approach to distribution of real-time market information that consumers take meaningful action on every day. Let's empower rural energy consumers with the information and infrastructure necessary to make smart energy choices, not through uneconomic technology, but through least-cost solutions that implement dynamic energy pricing and charging in ways that will work for everyone.


Footnote:

The ARRA allocates $2.5 billion to rural broadband deployment through the Distance Learning, Telemedicine, and Broadband Program of the Rural Utilities Servoce; $4.7 billion to broadband deployment through the "Broadband Technology Opportunities Program"; and a 50% federal funding match for qualifying smart grid demonstration projects through amendments to the Energy Independence and Security Act of 2007.

The Economist newspaper, long known for its progressive libertarian stance on everything from stem cell research to executive compensation, this week implicitly admitted that cap-and-trade is the preferable of many difficult-to-swallow options in the arena of potential US climate change legislation. It points to research that shows a cost of $69 to $137 per ton of carbon emissions reduced through the approaches funded by the American Recovery and Reinvestment Act (ARRA), "the stimulus bill". In contrast, it cites PointCarbon research indicating that a cap-and-trade approach will reduce emissions at a much more affordable $13 per ton.

In its briefing "Sins of emission" in the 14 March 2009 US print edition (page 26), the paper lays out both the perils and advantages of cap-and-trade policy as implemented in Europe and presently being discussed in the US Congress.

Among the political challenges to cap-and-trade, the paper highlights, are the strong opposition from highly coal-dependent midwestern states, the economic impacts of higher energy prices to consumers and businesses, and the volatility of carbon markets. (Europe's has seen 300% price swings since 2005).

Despite the criticism of cap-and-trade, and after a passing mention of the newspaper's ideal approach, a carbon tax, the paper focuses its attention on explaining why direct government intervention, highlighted in the stimulus bill in the form of credits and tax breaks for renewable power and smart grid build-out, is redundant with, and damaging to, cap-and-trade policy.

The paper concludes with a warning to those promoting renewable portfolio standards (RPS) and similar governmental micromanagement techniques:

Congress is unlikely to swallow the castor oil of cap-and-trade without such sweeteners, Washingtonians say. But the more lavish the subsidies, the more expensive cutting emissions becomes--and the harder for voters to stomach.

If you're interested in climate change policy, I highly recommend reading what The Economist has to say.

Links to articles at Economist.com:

Briefing: Sins of emission
"Barack Obama is keen to curb greenhouse-gas emissions with a cap-and-trade scheme. Can Congress come round to his way of thinking?"
http://www.economist.com/displaystory.cfm?story_id=13272099

Leader: Cap and binge
"America's politicians are at last getting to grips with global warming, but in a dangerously expensive way"
http://www.economist.com/opinion/displaystory.cfm?story_id=13278201

I had an "aha!" moment this morning related to the politics of nuclear power and nuclear waste. I have a new (to me) theory about why nuclear power is so controversial. To get out of the mess, we need to allow the nuclear industry more freedom to bear its own monitoring, safety, liability, and disposal costs. I think the industry's reaction to this cost burden will tell us once-and-for-all whether nuclear power can stand on its own two feet.

The US nuclear power industry is based on boiling-water and pressurized-water thermal reactor designs that utilize only about 1% of the available potential nuclear energy in their lightly-enriched uranium fuel. The nuclear waste from these reactors, consisting of a mix of fertile uranium, fissionable uranium, plutonium, and various lighter radioactive byproducts, gets pulled from the plant in such a state that it is both dangerous and seemingly useless. Storage and disposal of these radioactive wastes is fraught with risks of environmental contamination and serious public health impacts.

Nuclear research has developed technical solutions to this problem, but their economic viability remains in question. Several fuel reprocessing techniques have been developed that allow the spent fuel to be converted back into a resource that would be usable as feedstock to the reactors that produced it. Unfortunately, these same reprocessing techniques can be used to produce weapons-grade plutonium and highly-enriched uranium that could, potentially, be diverted into malicious hands. In response to this risk, the US stopped its nuclear fuel reprocessing program during the Carter administration, back in 1977. Other countries continued:

Reprocessing of civilian fuel has long been employed in Europe, at the COGEMA La Hague site in France, the Sellafield site in the United Kingdom, the Mayak Chemical Combine in Russia, the Tokai plant in Japan, the Tarapur plant in India, and briefly at the West Valley Reprocessing Plant in the United States.

from "Nuclear Reprocessing" (Wikipedia)

An alternative class of reactor designs, known as breeder reactors because of their ability to "breed" fissionable fuel from non-fissionable feed stock, can utilize either uranium or more-abundant thorium fuels more completely. In theory, up to 99% of the fuel can be consumed, considerably increasing the running time of the reactor on a single fuel load and similarly reducing the amount of waste produced.

Breeder reactors have been largely ignored in the US nuclear industry due to their increased complexity (and initial cost) over non-breeders. The market for mined uranium (a limited resource) has been soft for some time, largely due to the economy of scale established in the mid-1900s by strong US Government defense demand. With defense needs for uranium down since the end of the Cold War, the combination of established large-scale exploration and mining efforts and resulting supply surplus have kept fuel costs for commercial nuclear reactor operators artificially low. Also, the ultimate cost of both waste disposal and accident liability has been partially borne by tax-payers (see Yucca Mountain and Price-Anderson Act). These policies have amounted to indirect subsidies, providing industry with little economic motivation to invest in breeder reactor technology or other efficiency innovations.

The dangerous, partially-used nuclear fuel assemblies sitting around the US at various reactor sites are prime candidates for reprocessing and reuse. With the development of reprocessing facilities and a movement to breeder reactor designs, this waste could be a resource. Thus, moving this "waste" into long-term deep-geologic containment sites like Yucca Mountain is, in a way, like throwing away energy reserves. Economically, it might make more sense to reprocess this fuel, use it to generate power, then move the resulting fully-expended waste into long-term containment. But that's not happening.

Due to valid nuclear proliferation concerns, lack of a freely-functioning nuclear energy market, and competing political viewpoints, we find ourselves paralyzed. Citizens are paying for this inaction three times over: first, through potential long-term environmental contamination resulting from eventual plant decommissioning and storage of radioactive wastes at reactor sites; second, through partially tax-funded geologic storage efforts (e.g. Yucca Mountain); and third, through the loss of a waste resource that could be effectively converted into electric power through reprocessing and more efficient reactor designs.

I wish I could say that the answer is to renew our fuel reprocessing efforts and to fund research and development of commercial breeder reactors. But I can't, because I don't know if that makes sense from economic, public safety, and international relations perspectives. It seems a little hypocritical to respond to our energy crisis by exploiting the very technologies that we are denying to so-called "rogue states" like Iran and North Korea. (Wouldn't that be provoking them?)

I can say that I'd like to see the nuclear power industry reformed in such a way that a) reactor suppliers (e.g. GE and Westinghouse) and operators can be held fully liable for environmental contamination and potential public health impacts of their products (repeal the Price-Anderson Act), and b) that reactor operators fund 100% of the monitoring, clean-up, and disposal costs of their wastes.

I suspect, should this legal liability and direct financial accountability be put in place, that nuclear power would cease to be economically viable. But I could be wrong.

What do you think?

Resources:

IAEA's United States Country Profile

Wikipedia articles:
Light Water Reactor
Breeder Reactor

Parker, Sybil P. McGraw-Hill Encyclopedia of Energy. New York: McGraw-Hill Book Co, 1981.

I'm making some progress on the dynamic pricing economics front. This issue impacts our entire approach to smart grid, smart metering, and, ultimately, our ability to make use of plug-in hybrid electric vehicles (PHEVs).

It all boils down to demand response (DR), a utility's ability to adjust consumer demand to align with electricity supply. Effective DR is critical to the success of wind and solar deployments. As such, how we choose to implement DR is at the heart of current smart grid discussion. Here's how I'm thinking about it right now.

The question: What is the minimum amount of data and control that a consumer must offer to its electricity provider at the meter interconnection to empower the utility to confidently understand its demand response load shedding ability with respect to that consumer's immediate energy needs?

The answer: Much of the electricity load in a home can be attributed to a handful of services within it. For the sake of discussion, I'll take what I suspect are the top three: comfort heating/cooling, water heating, and clothes drying. I think I can make each of these loads both responsive to price signals and predictable to the utility company without giving the utility direct control over enabling or disabling the load.

Comfort heating/cooling
A consumer should be able to define his heating/cooling needs in the form of a three dimensional demand curve by time period. If I could set my thermostat based on dollars per day (or similar approach) rather than to a fixed temperature, then specify my hours of occupancy, the thermostat would be able to allocate energy to heating and cooling both appropriately and predictably. A mathematical model showing my heating/cooling demand function could be periodically sent by the thermostat, with consumer consent, to the utility to aid in demand response planning. By aggregating these demand functions in a centralized information system, the utility could construct a single demand response function to tie retail real-time electricity price to heating/cooling load.

Water heating
In my house, water heating load is dominated by the bathroom shower. I assume it is the same in most households. The scheduling and duration of showers (and thus hot water usage) would probably show a relatively predictable demand function with respect to price, if only the clear cost of showering at a given moment were readily available. A computer desktop widget or in-home display could easily convert the momentary price of electricity and water into the price per gallon for hot water, and from there to the price per minute for showering. The display might report that, for instance, a seven minute shower would cost $0.24 right at this moment. By implementing such a solution in limited trials before massive roll-out, the utility could develop a reliable mathematical demand model for correlating price with load shedding ability.

Clothes drying
Following on the idea I laid out for water heating, the consumer could be informed of the momentary price for drying a load of laundry. This could be implemented most easily through a numeric display on the console of clothes dryer appliance itself, but it could also be provided through a computer desktop widget or an in-home display.

By making each of these three energy uses responsive to price signals in a predictable way, a utility company could confidently understand its ability to shed load through control of no more than the real-time retail price of electricity. This control empowers grid operators to make confident use of variable resources like wind and solar generation without depending on fossil-fuel powered spinning reserve capacity or draconian in-home appliance cut-off switches. This replacement "spinning reserve" would be based on well-understood, predictable consumer responses to price signals.

Taking this approach helps to mitigate consumer concerns over privacy protection, and it allows the consumer, not the utility or regulatory agency, to make energy resource allocation decisions within the home.

Moreover, without something like what is described above, the plug-in hybrid car concept cannot be accommodated into the electricity grid. This is a huge point, not be be ignored. (See the footnote below.)

To implement this approach, we need some major changes in the operating reserve rules and disturbance control standards set out by NERC and implemented by the regional grid coordinating councils. We also need the concept of the mathematical model of the consumer demand function to be added to the smart grid standards being developed right now by various groups, including NIST, the OpenSG Users Group, the ZigBee Alliance, and the GridWise Alliance.

--

Footnote

Plug-in Hybrid Electric Vehicles - Another area of concern are PHEVs. This is one technology which completely shatters the central generation to end-consumer power system model that is in operation today. Most aspects of these load and storage devices (in technical terms) are yet defined. Policies and regulations are also not quite complete and certainly business models for energy accounting are sorely lacking. There are several cross-industry groups assessing these gaps and proposing solutions. Utilities are attempting to prepare by obtaining advanced metering devices which are able to perform bi-directional energy accounting, by developing strategies around home area networks and information models, and investigating financial accounting strategies, but much of this work is incomplete.

(Quoted from Smart Grid Standards Assessment and Recommendations for Adoption and Development, Draft 0.83, February 2009, by Erich W. Gunther, et al, of EnerNex Corporation for the California Energy Commission.)

I just read a passage in the McGraw-Hill Encyclopedia of Energy, Second Edition, Copyright 1981, that really chaps my hide. It's not the content that is irritating, but the date at which such a clear statement about the link between fossil fuel use and climate change was published. It was even by reputable experts in a readily-available, general-audience book. The rub: our parents ignored it.

From page 330, in an entry called "Hydrogen-fueled technology", subsection "Hydrogen-fuel economy":

The driving motivation for the hydrogen fuel economy is the search for a cyclic, indefinitely viable energy metabolism pattern to replace the current reliance on fossil fuels as these approach exhaustion and their recovery ceases to be economically attractive.

While coal is widely heralded as an economically attractive long-range replacement for fossil hydrocarbons (with synthetic hydrocarbon fluid fuels manufactured from coal), it is also limited, albeit at a more future date than petroleum... Even here, however, caution is necessary in view of the possible buildup of CO₂ in the atmosphere to a level that would severely modify the global climate. Data collected since 1950 show that atmospheric CO₂ has been rising at a rate of 0.3-0.4% per year; between 1958 and 1979 it rose by 6.4%. This corresponds to about half of the carbon burned as fuel remaining in the atmosphere as CO₂. Extrapolation to the end of the century [2000] indicates that atmospheric CO₂ will increase another 10-15%, and that by about 2030 it may be double the present level. This could lead to a global warming of about 3°C, resulting in major and deleterious large-scale climatic changes. It therefore seems most prudent to endeavor to understand totally the consequence of carbon release on the global climate, as well as in the meantime seriously to pursue alternative energy systems not reliant on carbon.

Lawrence W. Jones, Emeritus Professor of Physics, University of Michigan, wrote these paragraphs along with a generally insightful technical analysis of hydrogen-based energy technologies, based wholly on academic articles published from 1971 to 1979.

That was 30 years ago. What have our parents done in that time to fix the problem? What will we do?

According to the US NOAA, actual CO₂ concentration increased by 9.7% from 1979 to 2000. It increased by another 4.4% from 2000 to 2008. What will it be by 2030?

P.S. There's a nice photo of a smiling energy entrepreneur standing next to a shiny late-70s Chevrolet Monte Carlo on page 328. On the trunk lid are painted two words: "HYDROGEN POWERED". Way to go, Roger E. Billings of Billings Energy Research, Inc.

Links:
US EPA Climate Change web page
US NOAA Earth System Research Laboratory CO₂ data
Billings Energy Corporation (yes, Roger E. Billings is still alive and kicking)

I'm afraid I have concluded that the grid is not the problem. Instead, the economics behind how we think about the electric energy market is fundamentally flawed. The electricity industry is desperately in need of some disruptive thinking not only from technologists, but also economists.

I assumed in a previous post about privacy and the smart grid that we could balance generation capacity (supply) with load (demand) simply using a free market approach. Shame on me for trying to apply what I learned in my college economics classes.

I wish it were so simple.

It turns out that the fundamental way many incumbents in the electricity industry think about power is predicated on the idea that we can

a) easily forecast demand (because retail prices don't vary in the short term), and
b) increase or decrease generation capacity (to a limit) more or less at will.

Break those assumptions, and the grid falls down.

Instead of building generation, transmission, and distribution processes to handle a highly dynamic market all the way from generator to consumer, grid operators for a long time have only had to worry about fluctuations caused by equipment failure and relatively predictable fluctuations in consumer behavior (based on the day of the week, for example.) Heating and cooling demands vary, but slowly and somewhat predictably.

Most bulk generation agreements are determined through long term contracts. I read (I wish I could remember where) that only about 10% of bulk electricity is traded on the real-time market. Why? Because traditional generation from coal, gas, or uranium is controllable ("dispatchable"). It costs the same to run a particular generator today as it will cost tomorrow. The output is a known quantity. In that world, long-term contracts make sense. Even generation from hydro power, though subject to seasonal and climate impacts, is dispatchable in the short term.

Enter wind energy. It is non-dispatchable; it cannot be controlled. Generation capacity is not predictable. In Grid Land, small deviations in system voltage or frequency can trigger automatic load-shedding (i.e. black-outs). When random wind gusts enter the picture... unless you have gas or hydro turbines spinning and online, in standby mode, just waiting for the wind to stop... well, let's just say that you should keep some firewood and candles around.

Wind power doesn't fit into the old system of long-term bulk power agreements. It fluctuates too much, and it requires too much reserve capacity in the form of idling natural gas and coal plants to back it up, just in case the wind dies. Idling capacity uses little fuel, but it's really hard on plant and equipment, and capital costs don't go away just because a plant is not producing power. From one perspective, leaving an expensive base-load coal plant idling is a gratuitous waste of money. We'd like to think that the plant shouldn't have been built in the first place - but that wouldn't have worked either, because we need it on standby in case the wind stops.

Obviously we need to find a way to better balance supply and demand.

I see two ways around this pickle.

One is to pass the real-time price of generation all the way through the electricity supply chain to the consumer. That's the way resource allocation problems are generally solved in free-market societies, as evidenced by the ever-fluctuating price of gasoline at your local station.

The second, favored by NERC policy and by the large utilities, would allow grid operators to treat some of the loads in your home as low priority and interruptible. Your furnace, air conditioner, or water heater would be good candidates. In exchange for some fixed discount on your power bill, the utility gets the right to monitor the loads within your home and turn them on or off to balance fluctuations in energy supply.

Right now, we seem to be on the second path. It has its advantages and disadvantages. But I'd like to see more thought put into the first approach, making the energy supply chain look more like the supply chain of other goods and services, where supply and demand reach equilibrium through price fluctuation.

Would some of the economists out there please join the discussion and help me out here?

Links:

"Integrating Wind Generation Into Utility Systems" from North American Windpower

"ELECTRICITY STORAGE: THE ACHILLES' HEEL OF RENEWABLE ENERGY" from Chemical Engineering Progress

I will admit that I am often skeptical of big business and big government. I'm a traditional liberal who adheres to the principle that, generally, more individual freedom is a Good Thing. From this position, it would be easy for me to join the ranks of the paranoid folks railing against advanced energy management ("smart grid") solutions. But I'm not going along with the radicals. Before I tell you why, check out a few examples of the paranoia I'm talking about:

Once they can control anything, they will want to control everything. Do you want to loose [sic] control of when your lights work?

-- Jim Holm, comment on WSJ blog post

Smart Grid is part of a global initiative to manage information, all information.... Did you catch that? Smart Grid will allow the government to collect information about you, your habits, and possessions. All they need are a few sensors to know what is in your refrigerator; how long you spend in the bathroom; if you smoke in your home; if you drink alcohol in your home; and how many people are in your home or business at any one time. Science fiction? Don't bet on it.

-- RFD America blog post

This paranoia is one of the things that makes America what it is, and it's often a healthy check against runaway bureaucracy. In this case, however, it is setting itself up to do more harm than good.

We can develop technical solutions to achieve our energy goals while protecting personal privacy, thus invalidating the arguments above. The Internet has shown that to be possible through tools like firewalls, encryption, username/password access control, anonymizer services, and data privacy laws.

Proponents of electricity demand response technologies in the form of consumption monitoring and dynamic pricing (enabled by smart meters, in most scenarios) must match Americans' paranoid skepticism with hard facts and powerful privacy protections. Hype is not enough. Failing to do so will empower the critics with sufficient ammunition to bring down the whole effort.

To understand the impact consumer fear and skepticism is having, you need go no further than the National Association of Regulatory Commissioners (NARUC), the state utilities' non-profit interest group. This powerful association has the ear of federal government and is soft-pedaling demand response and smart meter deployments in fear of consumer rejection. From a NARUC statement issued March 3, 2009:

[NARUC ]President [Frederick] Butler, who also serves as Co-Chairman of the NARUC-Federal Energy Regulatory Commission Smart Grid Collaborative, said that too much of the focus on the "Smart Grid" is on end-use consumers who may not understand the benefits or even want new smart meters. Rather than building confidence in the Smart Grid, this approach will likely breed opposition. Instead, President Butler recommended that lawmakers, policymakers, and industry focus on the back-end operational systems, such as upgrades to the transmission and distribution systems.

Yes, NARUC is partially right. We could benefit from improvements in the distribution grid. But I sense a war brewing between the "grid expansionists" and the "demand reductionists". Both approaches have the potential to improve penetration of renewable power generation. Both can improve grid reliability. Both can create jobs. But only consumer empowerment through consumption feedback and demand response measures, in combination with a revenue-neutral carbon tax, will reduce greenhouse gas emissions and reduce our dependence on fossil fuel power generation.

Standards bodies (NIST, IEEE), environmentalists, smart meter companies, ZigBee alliance members, and anyone interested in peak shaving and demand shifting must unite to address the privacy issue head-on, before the radicals use it as a blunt weapon with which to bludgeon us to a slow and painful death.

Read more on this topic in my previous post, Get your grubby hands off of my HAN.

Before we can empower consumers with home power monitoring solutions and other "smart grid" services, we must ask regulators to rule that data gathered from a consumer's utility meter belongs to the consumer. The utility must use this information only for the purpose of charging that consumer for service. If we do not settle this issue quickly and decisively, energy demand management solutions that empower consumers to make their own decisions through variable pricing may get passed up in favor of solutions that allow utilities to automatically control appliances within a consumer's home.
 
At the Google/GE "Smart Grid" conference held at Google's office in Washington, D.C. on 19 February 2009, Google's Edward Lu, program manager for Advanced Projects, phrased it like this:

One of the things that's needed very soon is clarity on who owns the data [relating to a household's electricity consumption]. We [at Google] have a position that it's a bit like this information, what an individual consumer used, belongs to that consumer. But that is not universally recognized. I think it needs to be. There needs to be some clarity on this going forward.

On March 3rd, at a hearing on Capitol Hill, Lu confirmed this position.

One of the perceived leaders in smart grid thinking is the electrical utility Southern California Edison (SCE). In its SmartConnect^TM use cases and corresponding US patent application (US 2008/0177678 A1), SCE describes a smart grid in which the electrical utility, not the consumer, monitors individual appliances and turns them on or off as it deems necessary. The patent move was covered in the news back in September.

On page 1, in paragraph 12, the patent reads: "Typically, the advanced utility meter communicates between the utility and multiple appliances and/or other pieces of equipment located at each individual customer location. In a preferred embodiment of the invention, usage data from individual pieces of equipment located at each individual customer location is gathered by the advanced utility meter and transmitted to the utility by the advanced utility meter."

It continues in paragraph 15: "...instructions can be communicated from the utility to the individual customer locations which are used by usage controllers at the individual customer locations to control electrical usage by individual pieces of equipment at the individual customer locations."

While this approach provides the utility with ultimate control over the load on its power grid, it violates the consumer's privacy and cripples market-driven decision making. It puts the utility in a position to sell private consumer information to "partners" with products to market to consumers. Plus, having to go through the utility company to get access to information makes it very difficult for the consumer to selectively share this information with third-party solution providers for the the purposes of, for example, non-intrusive load monitoring (NILM). Innovation would be severely stifled.

Fortunately for consumers, the demand management benefits of smart metering can be obtained without this level of involvement on the part of the utility.

A much better solution moves the load monitoring and management intelligence to a consumer-controlled smart home management device that integrates with the home area network (HAN). This device depends on utility-controlled adjustable pricing to incentivize individual consumers to set their own "smart" devices to turn off or on based on a combination of the instantaneous cost of electricity and the need for the device at a given time. In this consumer-centric, price-driven approach, the utility would not need to care about how much power my sauna, for example, uses, but it could depend on my smart meter's variable pricing capability to incent me to turn my sauna off when electricity is at a premium.

I hope federal regulators read the SCE patent application and thoroughly review multiple approaches to implementing smart grid demand management before agreeing to let utilities take ownership of our information and control of our homes. We can save energy and empower utilities through implementation of time-of-use (TOU) pricing, dynamic pricing, critical peak pricing, or real-time pricing without giving up consumer privacy and control. Let's set a consumer privacy protection policy down as law now so that we can move on with the hard work of implementing smart grid technology at the massive scale that is so urgently needed.

Last week, feds in the legislative branch began talking about overriding state authority to review and approve new long-distance power line rights-of-way. In effect, they said that new long distance electricity distribution lines would be built, no matter who, at a local level, objected. They felt justified in such a draconian policy given that they see no other way to quickly develop adequate distribution capacity to accommodate the deployment of federally-subsidized and soon-to-be mandated (see Senate Bill S.433, presently in committee) wind energy farms. I complained about it, but that doesn't change the fact that these policies are good for the Bonneville Power Administration (BPA) and development of local renewable energy resources.

Now add to the feds' position on new power lines the fact that the recent federal economic stimulus package allocated $3.25 billion of borrowing authority specifically for the Bonneville Power Administration's reconstruction of its regional electricity distribution system. This is a good thing even if I don't agree with how it came about. Let me explain why.

The overhaul is needed because the existing BPA distribution system is tapped out. With huge wind farms coming online in the eastern Columbia River Gorge, square in the heart of the BPA service area, BPA expects to see a doubling of local wind power generation capacity this year. According to its forecast, in 2010, it will be able to cover 30% of the area's peak demand with electricity generated from the wind.

That sounds great, but it is actually a problem. Wind energy, unfortunately, is wildly variable and surprisingly unpredictable. Grid operators, like BPA, must be constantly ready to add or shed either load or on-demand generation capacity (such as hydro or natural gas). With 30% of generation coming from wind, BPA just won't be able to keep the system balanced. It must be able to share the burden of balancing (or "integration", as they call it) with a larger service area. That requires better distribution infrastructure.

This is such a large problem that BPA is now asking wind farm operators to "spill" wind during peak generation periods. The alternative would be to push the grid's voltage and frequency outside of the acceptable ranges, possibly causing problems for electricity end-users.

So, with federal money in hand and federal legislators ready to kick some local NIMBY butt, the BPA is poised for some major infrastructure overhaulin', starting real soon now. Seeing as how one of my favorite jogging routes runs through BPA's Transmission Business campus in Vancouver, Washington, I'll be keeping my eyes out for the line crews.

Reading patents can be dull business at times. It is especially so when the patent has been written by someone skilled in the art of generalization and abstraction for the purposes of intellectual property CYA. Or so it seems. In that regard, my hat is off to StatSignal IPC, LLC., and now SIPCO LLC. US patents 6,891,838 and 7,103,511, written by StatSignal and now owned by SIPCO, cover (in my interpretation) what we now call home area networks (HANs) and wireless home automation systems. These patents are full of verbal hand waving and claims that could be broadly interpreted. They are presently being used to give Amazon and eleven other companies a hard time in East Texas US District Court. The suit was filed on 19 September 2008 as "Sipco, LLC v. Amazon.com, Inc. et al".

Thanks to Mark P. Walters of Washington State Patent Law Blog for bringing this to our attention in his post back October 15, 2008:

In other Seattle patent litigation news, Amazon was sued over home automation systems last month. It and 11 other companies were alleged to infringe US Patent Nos 6,891,838 and 7,103,511, patents covering systems that automatically adjust things like temperature, lights, security, entertainment, and plant watering, among other systems that use energy in your home. The plaintiff is SIPCO LLC, an entity that was formerly known as "Statsignal IPC LLC" according to filings before the Georgia Secretary of State's office. The patents in suit have changed hands six times since 2000, including a sojourn with Hunt Technologies, a company that was later absorbed by Landis+Gyr. SIPCO gained ownership of the patents by way of a judicial decree in July 2007, handed down by the U.S.D.C. in the Northern District of Georgia. I'm sure there is a story there, but I'm too busy to chase it down. SIPCO is related in some way to IP Co. LLC, they share the similar corporate addresses, names, and agents, according to Georgia Records (IP Co. used to be known as "Statsignal Metering Company, LLC."). IP Co. and SIPCO were plaintiffs in a case against Cellnet Technologies, Inc. and Hunt Technologies, LLC, (among others) filed in 2006 in Georgia.

The following companies were named as defendants:

AMAZON.COM, INC. ("Amazon"), COOPER INDUSTRIES, LTD. ("CIL"), COOPER WIRING DEVICES, INC. ("CWD") (collectively with CIL, "Cooper"), CRESTRON ELECTRONICS, INC. ("Crestron"), EATON CORPORATION ("Eaton"), HAWKING TECHNOLOGIES, INC. ("Hawking"), HOMESEER TECHNOLOGIES, LLC ("HomeSeer"), INTERMATIC, INC. ("Intermatic"), LEVITON MANUFACTURING CO., INC. ("Leviton"), SMART HOME SYSTEMS, INC. ("SHS"), WAYNE-DALTON CORP. ("Wayne-Dalton"), and X10 WIRELESS TECHNOLOGY, INC. ("X10")

Sometimes I really don't understand how some of these patents get issued in the first place, as the technology under consideration seems to have existed in the marketplace since long before the patent filing. But these patents were granted by the USPTO, and that means those who are trying to innovate in the area of energy demand management through home area networks (HANs) and wireless home automation may have a legal battle in front of them unless they strike a deal with SIPCO. Innovators beware.

Note also that StatSignal obtained a patent on wireless utility meter gateways, US Patent 6,836,737. This one was reassigned from Hunt Technologies LLC to Lloyds TSB Bank LLC (London) in mid 2008.

Disclaimer: I am not a lawyer. Please do not construe this as legal advice.

Because it's the weekend, I'm focusing on DIY stuff. Sunday is the day to let one's inner idealist out. Why not shine some light on grass-roots power monitoring efforts?

First, let's take a look at Dan Stahlke's home power monitor. He chose the TED (The Energy Detective) approach, but went 100% DIY. He started with home-brew breaker panel inductive current sensors. Tying the sensors to a control box, he embedded the intelligence to compute load, display a usage line graph, and communicate with a PC. He uses an Atmel ATmega168 microcontroller. While the project is interesting, I'm beginning to see a trend in what people learn from these types of DIY investigations: "...the moral of the story is that in our house the hot water heater, refrigerator, and laundry completely dominate the power usage. The compact flourescent lights and computers don't really even make a dent."

I won't bother quoting further from Dan's project write-up--it's short, so just read it on his website so that you can also check out his nifty charts.

From my point of view, the most interesting thing about Dan's solution is the granularity of the data he gathers. Because he is sampling the load so frequently and with such precision, he is able to draw very specific conclusions about his power usage through ad hoc non-intrusive load monitoring (NILM). I don't think any of the existing commercial solutions can match his aggressive 9,615 samples per second ADC sample rate.

Edward Cheung, NASA engineer by day, developed a similar current-sensing solution back in 1999. Unlike Dan's solution, Ed's ties in with his house's demand control system using X-10. The microcontroller is a Microchip PIC 16C74. Obviously, the solution is dated, but it is also possibly the first documented instance of a working home area network (HAN) that utilizes a load monitoring (power metering) node. If you know of something earlier, please leave a link in the comments section.

Why is all this relevant? Besides being interesting, the Cheung solution might play a role in the current patent dispute related to the StatSignal HAN patent I will mention in tomorrow's post. But remember: I'm not an intellectual property expert...I just play one on the Web.