A couple of weeks back I was in Charlottetown, Prince Edward Islands, a small Canadian city with a population of about 30,000. It’s a beautiful city with a small downtown and a very scenic harbourfront, unspoilt by industrialization. It’s the kind of city I want to go back to whenever I need a break and some downtime. Life is so laid back. The water is so calm and still.
I began wandering aimlessly around the city and right outside a house, I noticed an Itron Smart Meter!! Charlottetown is one of the last places in Canada I was expecting to see a Smart Meter. I walked around the block and every house I could see had an Itron Smart Meter outside it. I was very surprised to see Charlottetown being an early adopter of Smart Meters when there are major cities in the United States still working on installing their first Smart Meters.
Most people I talk to are unclear on what Smart Meters are or what the Smart Grid is. In short, Smart Meters measure each home’s energy consumption data in more details and report back to utilities over a wireless network. This way, someone from the utility company does not have to take down meter readings every 2 months. In Ontario, every hour the current meter reading is sent back to the utility. Smart Meters are a key component of the Smart Grid, which is a modern electricity grid enabling two way communication between each home and utilities, increased reliability and security, more data to help manage and optimize energy consumption, and better integration with renewable energy sources.
Some of the major problems with the traditional power grid are:
1) Consumers do not have data to understand and optimize their energy consumption
Traditionally, homeowners see a bill from their utilities containing their total energy consumption for an entire month. However, they are unaware of what parts of their homes or what appliances/devices are contributing to the bill and how they can reduce their bills.
Secondly, because the traditional electricity bill only displays monthly consumption data, there is limited trending data available to users. The only conclusions a consumer can draw from the limited trending information available is what months his or her energy consumption is at a highest and by what percentage compared to other months. However, if we had more granular trending data such as “Your air conditioning usage increases by 80% between May and June, which is 40% above your neighbourhood average”, users would be able to make corrective measures to reduce their bills. Furthermore, comparisons with averages such as neighbourhood average or city-wide average will help set a baseline for consumers to set energy efficiency goals.
2) Consumers are unaware of ways to improve their energy efficiency
The average home owner has no expertise in improving home energy efficiency. Let’s take Toronto and Ontario as an example. One of the biggest energy conservation challenges identified by the Ontario Power Authority is Customer Awareness.
Government-supported efforts such as Green$aver have been launched to help residents of Toronto improve their energy efficiency. It is partially motivated by the fact that the City of Toronto determined that more of the city’s CO2 emissions came from houses (30%) than cars (20%) because most Toronto homes were built before 1960 and were poorly insulated. Such efforts have met with some success. For example, retrofits of Toronto Community Housing units done by Green$aver have achieved permanent 35% – 40% reduction in energy use, more comfortable homes, and reductions in greenhouse gas emissions of over 3 tonnes per house annually. Having more data about energy consumption enables us to improve energy efficiency.
3) There are no incentives to shift energy consumption
Taking Toronto as an example again (mainly because I live in Toronto!): to manage peak demand, Toronto Hydro has come up with a Time Of Use pricing structure which encourages consumers to reduce energy consumption at peak times and shift it to off-peak times.
For utilities like Toronto Hydro, the advantage is reduce cost because additional energy generation during peak times is costly. There is a significant price difference between off-peak and peak-time this new pricing structure which presents consumers with an opportunity to optimize their usage and drive more consumption to off-peak times. The most important scenario is plug-in electric vehicles. As PHEV’s become more popular, we’ll need better ways to manage the charging so we ensure this extra load is distributed. If we don’t distribute the load over time, it is the equivalent of a traffic jam in the electricity network, except it can result in blackouts (which results in more profanity than a regular traffic jam!)
Utilities are already trying to help consumers shift their loads, but they obvious lack the resources and expertise to manage each home’s energy consumption optimally. For instance, Toronto hydro has started a program called peaksaver in which they pay customers $75 and swallow the cost of installing a small device on the customers Air Conditioners which reduces the AC’s energy consumption during peak hours
Therefore, Smart Meters enable a Smarter utility grid, which creates many more possibilities for innovations around managing and optimizing energy consumption. And for someone like me building a startup in this space, it’s very exciting to see adoption of these smart meters in seemingly unlikely locations like Charlottetown. Keep installing them Smart Meters!!
