Smart meters – a European viewpoint


Mike Parr, PWR 
By Mike Parr, PWR

Through the 3rd Energy Package the European Union (EU) has mandated the rollout of “smart meters” by member states. All member states need to undertake feasibility studies although most of the larger ones are on track to have some form of smart metering system in place for most of the residential sector by 2020.

To support this rollout in early 2009 the European Commission (EC) gave a mandate to CEN/CENELEC/ETSI to develop a standard for smart meters, covering the meter and the underlying infrastructure. The 7th Framework Program project (Open Meter) is undertaking the actual standardization work.

Smart meters and humans
Other smart meter-related 7th Framework Program projects have been trying to find out what people want from smart meters. One answer (Improgres project) was “switch the lights on and off,” i.e. to take control of appliances. The desire of people to leave control of appliances to computers/networks is partly supported by a recent U.K. study (commissioned by the company Energenie). This study suggests that although people support the concept of energy efficiency in the home, they are either too apathetic or too lazy to switch things off or to invest in energy efficient appliances.

Such attitudes can be changed in one of three ways:

  • Education programs (slow impact, uncertain outcome, no political cost)
  • Energy pricing (fast impact, certain outcome, political cost)
  • High levels of home automation through smart meters and networks (medium speed, expensive, low political cost).

Currently the EU seems to be following the third option, perhaps due to heavy support by the IT industry coupled with low political risk. The issue of energy pricing will be considered below.

Smart meters and energy efficiency

Energy using devices in the home fall into three (and only three) broad classes:

  • Autonomous – these operate automatically, e.g. fridges, freezers, circulation pumps, bulk water heaters
  • On-demand – these are usually required instantaneously, e.g. lighting, cooking, television
  • Time variable – e.g. washing machines, dryers, dishwashers.

Autonomous devices tend to account for most energy consumption in a household (not counting space heating) typically up to 20 percent (fridges, freezers and circulation pumps) and as high as 30 percent if water heaters are included. Although the percentages vary between different EU member states, they tend to hold true across most of Europe, even into the new member states.

The second most energy consuming class of appliances are lights, typically accounting for around 12 to 18 percent. Time variable products typically account for around 4 to 8 percent.

With respect to energy efficiency, investment in more efficient autonomous and on-demand devices is the only way forward. For example, there is no reason why most lighting in a home could not change to LEDs, changing the 12-18 percent consumption to perhaps 1 percent. Fridges and freezers with an A++ rating will reduce energy consumption of cold appliances by 66 percent thus moving the 20 percent autonomous well below 10 percent.

Smart meters bring little directly to the problem of energy efficiency. However, indirectly they will play an important role in “attitude adjustment,” as will be shown below.

Smart meters and device control, aka time shift
A recent study in Sweden measured the energy consumption of appliances in around 600 houses and apartments. This showed that the evening peak in energy demand was caused by three devices, lighting, cooking and washing. The lighting problem can be solved by LEDs. At the time of the study the penetration of CFLs in Sweden was 10 percent, i.e. incandescents and halogens accounted for most of the lighting load – the situation existing in other EU member states.

It is difficult to see how cooking can be time shifted, leaving washing, which accounts for 8 percent of overall household energy consumption. Discussions on time shift functionality seem to focus on how to implement it rather than its cost-benefit, i.e. is it worth time shifting 8 percent of residential load? Perhaps time shifting will be important with respect to electric vehicles?

A U.K. Department of Transport report (plus confirmatory comments by the German regulator DENA) indicate that the power demands of EVs (or PHEVs) will have almost no impact on power networks up to 2020 and very little after that even if penetration levels exceed 50 percent of the total fleet. In terms of “off peak charging” there are a number of technologies available, none of which need smart grids to facilitate EV charging.

PWR has attended various workshops on EVs (hosted by the EC). EVs will contain formidable levels of computing power including the management of charging. This raises the question, what does a smart meter – dumb in comparison to the EV – bring to the equation?

One phrase never heard in smart meter circles is “dynamic demand management,” which in essence uses frequency changes on the grid to decide if a device can switch on or off. DDM’s main application is with respect to autonomous devices and possibly EVs. DDM implementation does not require smart meters, which offers a possible explanation as to why one rarely hears about it.
Smart meters and attitude adjustment
At this point readers may be wondering “why bother with smart meters when they do not seem to offer anything?” In summary the problem concerning people and energy breaks down into four elements:

  1. People are lazy or apathetic (or both) with respect to energy efficient appliances.
  2. Pricing for electricity tend to be flat rate or at best dual rate and does not reflect either generation constraints or consumption impacts.
  3. The only way for the residential sector to save energy is through investment in energy efficient products.
  4. Some energy efficient products have a relatively fast turnover (lights), while others have a slow turnover (white goods).

The USP of smart meters is time-of-use (TOU) tariffs. Without TOU and low barriers of entry to the energy market (for energy service companies), the true value of smart meters – their ability to adjust attitudes to energy consumption – will never be realized.

TOU tariffs have the potential to drive large improvements in residential energy efficiency, which other technologies aren’t doing. For example, LED lights pay for themselves within one year of installation, but are consumers running out and buying them? To some extent, but not that much. TOU pricing could include bands of peak energy usage, e.g. one price for kilowatthours below 1 kWpeak, another price below 2 kWpeak and a third price for above 2 kWpeak (ADMDs in the UK range from 2 kW to 3 kW depending on heating systems). The pricing need not be linear, but could be logarithmic, and that would lead to a considerable refocusing of minds and probably a levelling of the evening peak.

Smart meter hot topics
Debate on TOU tariffs (and data collection from smart meters) seems to focus on “consumer education,” “data privacy,” “data security,” and in the case of the European regulators’ group ERGEG’s meetings “energy poverty.” Schools, universities and similar academic institutions are great places to get educated, but the role of power companies is to provide power not to educate.

With respect to data privacy, many people have loyalty cards for stores and other providers. Taking the example of the U.K. supermarket chain Tesco, it offers loyalty cards, a mobile phone service, is an ISP, is a bank, offers insurance, etc. Few people ever comment on the totality of personal data a supermarket holds (what you eat, where you phone from, who you phone, your bank transactions, where you browse, etc.) but apparently energy consumption data has the potential to impinge on personal privacy. Given the above this appears to be non-existent.

Likewise, the debate on data security gives the impression of wheel reinvention. RADIUS is used by most (all?) internet service providers to authenticate subscriber connections to their services. It has been around for a long time and works fairly well, provided users don’t “lend” their passwords. Smart meters will be connected to a network, and RADIUS could be used for connection/authentication purposes. Perhaps there is more money to be made in developing a new system?

“Energy poverty” is a serious issue and one which governments are eminently well positioned to address. Energy companies have a supporting role with respect to action in this area. However, energy poverty is no reason not to roll out smart meters and TOU tariffs as soon as possible.

With respect to saving energy, most people are lazy, apathetic and delusional (i.e. they think they are doing “their bit”). Debate in the smart meter community seems to suggest that the power industry needs to hand-hold this group. The reality is that the public needs a wake-up call on energy use. Smart meters coupled to TOU tariffs are well positioned to deliver this. There needs to be a move from debate and navel gazing to implementation as soon as possible. This may involve some experimentation to find out what works. However, the patient looks healthy enough to me and quite able to accommodate some surprises.

Those who think that industry is somehow more switched on than the residential sector with respect to energy saving are encouraged to read a recent Fraunhofer report, which suggests German industry could easily save up to 30 percent of its current energy consumption – findings that undoubtedly apply to other EU member states.