Smart Meters (Do they go far enough?)

September 22, 2008

I am convinced that a major revolution is about to occur in the way electrical grids operate. I am worried that the groups running the Smart Meter pilots in Ireland could miss an opportunity to be ahead of the curve.

Electricity generation and supply has, since the time of Edison, been about meeting inflexible but predictable demand with flexible supply. This inflexible demand has been met by huge generation plant which is dispatched in synchronisation with the predicted demand. This description of electricity networks is about to change.

1) A growing percentage of energy will be generated by non dispatchable supply such as wind, wave and solar.

2) Microgeneration at the domestic level is going to make demand less predictable.

3) Electricity consumption will increase dramatically. As we move away from fossil fuels in our homes we will use more electricity for heat pumps and for automotive (EV and PHEV). This will result is a doubling of our electrical consumption, even if we hold our overall energy consumption static, by the time we achieve our 33% renewable target in 2020. These new loads will be shiftable in time because of the use of hot water and battery storage.

These three changes will make the electrical grid partially inflexible on the suppply side. To compensate for this inflexibility on the supply side flexibility on the demand side will be required. So I believe that the Electric Grid 2.0 will look like this.

1) There will be a realtime price for electricity broadcast and available to every consumer in real time. Currentlyy the wholesale markets operate in this way. Soon the retail markets will follow suit.

2) There will be a spread between the purchase and sale price for electricity. You can decide to produce and sell or buy and consume at any time.

3) Standard time of day tariffs (STOD) will completely disappear. It will make more sense to have tariffs based on wind availablility. For example on 30 March and 16 April this year the wholesale price profile was inverted. On those days wholesale electricity was dearer at night than during the day.

4) Realtime response based on frequency will be widely implemented across the grid to stabilise short term supply and demand mismatch while price signals are being propogated.

5) Demand response will be mostly automated and not depend on user behaviour.

An unusual visionary in this change is Google.

“I could imagine a smart garage where I would plug in my car and the computer handles it. I could even make money by cost shifting….  It solves energy security, energy prices and job creation… and by the way, climate change.”  Eric Schmidt CEO of Google.   Google and GE have formed an alliance to exploit smart grid concepts.

It is vital that Ireland install smart meters that have 15minute power measurement intervals and can cope with real time pricing and not STOD tariffs.

Even though these ideas will apply globally, Ireland is aspecial case. We will, by 2020, have 30% of our energy coming from wind and we ahave a tiny grid size. We cannot copy others in thisregard. We must lead.

I am afraid that we will miss an opportunity.