Steve Nguyen, Echelon Corporation
Steve Nguyen, Echelon Corporation Click here to enlarge image
In July 2001 Enel S.p.A. of Italy, the world’s largest publicly traded electric utility, began deploying a network that should eventually connect 27 million homes and buildings with LonWorks based smart meters. Using smart metering technology will enable Enel to transform their existing power grid into an intelligent delivery platform, offering remote meter reading, remote connect and disconnect of service, and some demand-side management, and laying the foundation for value-added services like appliance monitoring and voluntary curtailment programs to consumers in the future. The new system is expected to pay for itself in four years with cost reduction and efficiency gains from regulated services.
As of September 2002, Enel has deployed over 2.5 million meters—all of which are working to decrease costs and improve customer care.
A new point of view
Increasingly, utility companies, like Enel, are turning to a different metering proposition than traditional static, one-way energy reading system that land meter has historically offered. The new proposition is one of networked energy systems that include bi-directional communications, digital electricity meters and a network approach that allows utilities to look at and interact with their grid and customer at the transformer, meter, and even inside the customer’s premise. Utilities can use these networked energy systems to better manage the power grid—improving the quality and reliability of service and decreasing operating costs—and to provide new services. The result is a win-win situation; better returns for the utility and enhanced services for consumers.
It’s a new way of doing business, a new way of providing customers service, a new way of adding value, and in the end creates a new type of utility. When making the move to an open-based two-way networking system, utilities need to ensure that the systems they adopt meet the stringent ROI [return on investment] requirements and performance criteria for today, and at the same time are the foundation for new services, revenue opportunities, and business in the future. One key way to lay the groundwork for future revenue streams and services is to embrace the notion of open systems and interoperability with the networks of devices within a customer’s premise. Using open, interoperable systems helps utilities to obtain the maximum return on investment by offering opportunities for efficiency today, as well as growth and expansion in the future.
Don’t reinvent the wheel
There are a number of accepted open standards and products on the market that have been tested in real world environments, including the LonWorks systems being used by Enel, that conform both to an open systems approach and accepted interoperability criterion. Moreover, systems like these utilize the existing power lines running to a site, and within a site, as the communications medium—effectively pre-wiring every premise and electronic device in a premise. With open solutions, utility companies can concentrate on the functionality and quality of their offerings, versus reinventing the wheel—were they to develop their own proprietary architecture and equipment to integrate with existing networks of intelligent automation devices.
In fact, by using technology platforms that are in use by the building, industrial and residential automation industries—not recreating the wheel—interject themselves into the network design of their customers’ sites. Doing so helps provide manufacturer’s of products with a means to communicate with their products without incurring additional costs for gateways or bridges. Additionally, it allows utilities to better leverage the existing connection that they put in at every customer location.
Utility as service provider
Utilities are uniquely positioned to reap the benefits of existing automation networks that have already been designed and installed using an open systems approach. Thousands of commercial buildings, industrial sites and homes have already been built with networks of intelligent devices that work together in local automation applications such as heating-venting-air-condition (hvac) systems, security systems, lighting, and many more. Every one of these sites requires power that is already being delivered by a utility. Virtually every new home built in the foreseeable future will have a connection to a utility. Yet most utilities focus on getting power to the site and ignore what’s in the home, building, or factory.
The existing automation networks, and all the new ones being brought online daily, represent applications, devices and systems that a utility could interact with. Consider a utility that not only provides core electricity services to its commercial customers, but also offers the ability to manage the behavior of the hvac and lighting system to modify their behavior based on energy costs and availability. These two systems alone typically account for more than 50 percent of a commercial building’s total energy consumption making the ability to optimize their performance result in a huge costs savings—and therefore an opportunity for utilities to become service providers.
In the emerging residential services space, utilities have another huge opportunity. Today’s utility, for the most part, delivers a commodity product to the residential customer in a protected market. The typical consumer has very little knowledge about the cost contribution of the various appliances and systems they use, ways to optimize energy use, or a means to determine if their products or appliances are beginning to fail. The same technology a utility would apply to the commercial & industrial space can be applied to homes.
The net is that utilities that select their meter reading or network energy services infrastructure with an eye toward interoperating with in-premise networks are in a great position to carry services that leverage such networks.
Nguyen is director of corporate marketing at Echelon Corp. Echelon is the creator of the LonWorks platform. More than 18 million LonWorks-based devices have been installed into homes, buildings, factories, trains, and other systems worldwide.