by Tanya Bodell, Energyzt
The Internet of Things, often called IoT, is rising in the ranks of technology buzzwords. Used to describe the network of physical “things” that can connect, collect and communicate with the Internet, the term was first coined by Kevin Ashton at the Massachusetts Institute of Technology in 1999, but is only now beginning to gain traction as the vision becomes a reality. Although participants in the electricity industry might not realize it, they are a growing part of this trend. The power sector already has begun implementing the foundation for Internet-based capabilities and is poised to capitalize on the IoT.
Before you can connect with things, you need to establish a relationship with the owner of those things. Utilities increasingly are using the Internet to connect with customers through websites and social media such as Facebook, Twitter and YouTube. Many host online outage centers where customers can report an issue and see what is happening in their area. Over time, self-reporting websites that rely on customer interaction will be adapted to reflect information from customer “things” through the Internet.
The move to smart meters is a clear example of how the IoT is progressing in the power industry. Prior to the nation-wide roll-out of smart meters as part of the American Recovery and Reinvestment Act of 2009, 39 percent of U.S. electric customers had automated meter reading (AMR), but only 10 percent of the meters used two-way communication, according to the Energy Information Administration (EIA). By 2013, the U.S. had nearly 52 million advanced metering infrastructure (AMI) installations (defined as having at least hourly measurement of electricity usage, two-way communication and remote utility management), of which 89 percent were residential. With installations slowing down, utility service providers are turning to network service offerings that capitalize on installed metering infrastructure. Expect more innovative offerings using metered usage and advanced metering information as utilities realize the potential of a smart grid combined with the Internet.
The IoT also is proliferating behind the meter. Thermostats, lighting and energy monitoring and controls increasingly are enabled with smart devices that connect with the Internet and can be controlled remotely by smart phones. “Smart appliances” have been around since the 1980s, but were smart only in the sense that they had computer chips to monitor operations and inform users about issues. Adding communication capabilities and remote controls to existing sensors and diagnostics can turn them into an energy management system. A key breakthrough occurred last year when GE began installing a circuit board in select GE appliances that can communicate with any computer, the first time a smart home platform has been opened up to crowd sourcing. These smart chips and associated apps promise to change the largest in-home consumers of energy into interactive load via communication over the Internet.
Once connection, collection and communication are established, the step to coordination is small. Incorporating retail demand response into competitive wholesale markets already has begun. Electric vehicles promise to be a new resource to the grid, with GPS and communications technology already installed in automobiles an integral part of the software required to provide ancillary services. Distributed energy resources, fuel cells and battery storage are evolving assets that can be coordinated with the system. Whether such resources are managed by transmission system operators or distribution system operators remains to be seen. Regardless, expect coordination of things that consume and store energy via the Internet.
To most in the electric industry, social media, smart meters, smart appliances and the use of electric vehicles and DER are not new ideas. Although still in the nascent stage, the industry has envisioned broader applications for a while. What may be new is the realization that progress in the energy industry is part of a broader trend happening worldwide to connect things to the Internet. As sensors, communications and coordination evolves in other industries, applications will accelerate in the power sector. The number of things connected to the Internet already exceeds the number of people on earth, but there is substantial room for growth, especially in the energy industry.
Tanya Bodell is the Executive Director of Energyzt, a global collaboration of energy experts who create value for investors in energy through actionable insights. Visit www.energyzt.com. She can be reached at: email@example.com or 617-416-0651.