next generation home energy management systems - a mass deployment impact 2009-11-11

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  • 1. Next Generation HomeEnergy ManagementSystems – A MassDeployment ImpactThis white paper assesses the potential financial and environmental impactof Home Energy Management Systems with Advanced Intelligent HomeDisplays on energy use reduction and peak shifting. The correspondingreduction in electricity generation and avoided investment in new powergeneration plants is assessed and quantified. This paper was written for utilityplanners, regulatory authorities, appliance makers, home energy manage-ment system makers, and consumers.Sponsored by:Intel CorporationAuthored by:Bjorn Austraat, Monoj Baruah, Partha Dhar, Hirotaka Ellis, Patrick Kalaher, Alan Lai,Timothy Morey, Roopa NambiarWipro Consulting Services, September 2009Copyright © Wipro Ltd. 2009. All rights reserved. No portion of this study can be used or reproduced withoutpermission of the author. For additional reproduction rights and usage information, go to www.wipro.com.Information is based on best available resources. Opinions reflect judgement at the time and are subjectto change. Intel® and Intel® Atom™ are trademarks or registered trademarks of Intel Corporation or its subsidiariesin the United States and other countries.
  • 2. Next Generation Home Energy Management Systems – A Mass Deployment ImpactTable of ContentsExecutive Summary 3Introduction 6Intelligent Home Energy Management Systems (IHEMs) 7The Impact of Next Generation HEMs on Electricity Consumption 9 Consumption Reduction through Mode Switching 9 Consumption Reduction by Information Display and Reminders 10 Additional Energy Conservation Benefits 12Reduction in Grid Energy Demand from One Million Households 13Reducing Energy Consumption at Times of Peak Demand 16 Modeling the Impact of IHEMs on Peak Energy Consumption 17Capital Expenditure Reduction Benefits 20The Impact of Photo-voltaic Micro-generation 22Additional Operational Benefits for Utility 23Conclusions and Recommendations 24Appendix I – Modeling Assumptions 25Appendix II – Consumer Fact Sheet 32 Wipro Consulting Business Transformation Practice page : 2 of 36
  • 3. Next Generation Home Energy Management Systems – A Mass Deployment ImpactExecutive SummaryNext Generation Home Energy Management (HEM) systems can serve as a vital catalyst for unlocking energy savingspotentials that benefit both consumers through lower electricity bills and utilities through avoided generation, distribution,and emissions costs. In fact, energy efficiency may be the most cost effective and accessible energy resource available to ustodayi . Wipro estimates that the use of a Next Generation HEM with advanced features can allow families to reduce electricconsumption by up to 31%, translating into savings of over $400 annually. For utilities, Next Generation HEMs deployed in amillion households can avoid billions of dollars in capital expenditures and over $60 million of generating costs.Multiple studiesii show that having information on electricity usage and electricity prices within homes can reduceconsumption by directly influencing end-user behavior. Next Generation HEMs, also known as Intelligent Home Energy Man-agement (IHEM) systems, are designed around an attractive and energy-efficient multi-function display device that is centrallylocated within the home.It provides not only relevant and detailed information about overall electricity consumption and usage patterns, but also de-livers advanced features that enable consumers to take energy saving actions. These capabilities go well beyond the featuresets found in traditional in-home displays. The IHEM system: • Monitors Performance: The system displays current use information and collects appliance-specific inputs from smart plugs. • Recommends Solutions: The IHEM gives consumers in-context reminders to reduce power consumption. • Sets Goals: The IHEM compares current consumption with historical and target consumption as well as aggregated information on other households. • Helps Users Reduce Energy Use: The IHEM has a mode switch that allows users to select “Home,” “Away,” or “Asleep.” It also integrates with programmable thermostats and energy storage devices such as plug-in hybrid electric vehicles. • Rewards Success: Using schemes such as bonus points, energy saver miles, or carbon offsets, utilities can set up ways to recognize virtuous energy savers by comparing families against the neighborhood. The IHEM has the capability to track energy consumption against targets and communicate rewards. • Is Central to the Household: When not in use, the display of the IHEM turns into an everyday device that is checked by households frequently such as a clock which provides additional information like peak electricity pricing periods.Wipro Consulting Business Transformation Practice page : 3 of 36
  • 4. Next Generation Home Energy Management Systems – A Mass Deployment ImpactThese enabling features allow end users to take energy saving actions that will result in an expected overall reduction inelectricity costs per year of as much as $470.30. This is from a combination of: • The mode switching capability allowing residents to easily manage their energy use when not at home or sleeping, leading to an annual electricity bill savings of $415.47. • The display of personalized information, the ability to set customized reminders, and the centralized visibility and control of appliances within the home allow users to be aware of and reduce the use of electricity during times of peak demand and correspondingly higher power prices. The impact of reducing electricity usage during these high price periods can enable residents to save an additional $54.83 annually. Intelligent Home Energy Management enabled Household Electricity Bill Savings $500 $450 $400 $350 Annual Savings from $300 Overall Reduction in Electricity Consumption $250 $200 Annual Savings from $150 Reduced Use of Electricity during Peak Hours $100 $50 $0 Annual Savings per Household Figure 2. Source - Wipro Consulting ServicesWipro Consulting Business Transformation Practice page : 4 of 36
  • 5. Next Generation Home Energy Management Systems – A Mass Deployment ImpactFrom the perspective of the energy providers, there are a number of operational and capital expenditure benefits from NextGeneration Intelligent Home Energy Management systems. • Energy producers can scale back the production of expensive electricity during peak times. In the Wipro sample scenario, 1 million customers enabled with Next Generation Home Energy Management Systems provide a cumulative savings potential of up to $63 million in one year. • Wipro estimates that the reduced demand from these customers in peak times can lead to a reduction in necessary peak capacity of 33%. This is equivalent to the capacity that is provided by 2.1 675 MW coal-fired power plants representing capital costs of $2.8 billion. Rearranging this in terms of natural gas power plants, the 33% reduction in peak capacity represents 5.75 250 MW natural gas plants representing capital costs of $920 million. • The reduction in overall electricity used by 1 million end-customers with IHEMs amounts to the offset of .02 quadrillion BTUs of natural gas and 371,000 metric tons of coal for use in electricity generation, representing significant savings in fossil fuel resources in one year. • Similarly, the overall reduction in electricity used by these 1 million IHEMs enabled customers results in reduced carbon dioxide emissions of 2.4 million metric tons in one year. This is equivalent to the emissions from over 535,000 conventional cars. Benefits to Utilities of Serving 1 Million IHEM-enabled Homes Avoid annual peak-time energy generation cost of up to $63 million Avoid the burning of as much as 371,000 metric tons of coal Avoid the burning of as much as .02 quadrillion BTUs of natural gas Reduce CO2 emissions by as much as 2.4 million metric tons or the equivalent of 535,000 conventional cars Reduce necessary peak capacity by the equivalent of 2.1 675 MW coal-fired or 5.8 250 MW natural gas plantsThis white paper explores these benefits in more depth, and sheds light on the assumptions and models behind thecalculations driving these figures.Wipro Consulting Business Transformation Practice page : 5 of 36
  • 6. Next Generation Home Energy Management Systems – A Mass Deployment ImpactIntroductionConsumers and governments are interested in reducing the amount of electricity consumed, and utilities are interested inshifting consumption patterns to reduce periods of peak demand. This change in generation and consumption of energyaligns with numerous international, regional, and national initiatives that all drive towards sustainable and increasinglycarbon-efficient economic growth. The Kyoto protocols have set legally binding reduction goals for its 34 signatories thatamount to 5.4% of carbon emissions by 2012 compared to a 1990 baseline. The European Union has set a 20/20/20 targetwhich consists of a 20% reduction of greenhouse gases, a 20% improvement in energy efficiency and 20% energy fromrenewable energy by 2020. On a national scale, Australia’s government has committed to reduce greenhouse gas emissionsby 60% by 2050 while Germany aims to exceed its Kyoto obligations and reduce emissions by 40% over the 1990 baseline by2020. Even emerging economies with sharply rising energy demands like China and India are increasingly willing to includeenergy efficiency in their growth plans. China’s most recent 5-year plan includes a mandate to improve energy efficiency by20% during the duration of the plan (2006-2010). In India, Smart Grid technologies hold the promise of reducing theestimated 32% of losses currently incurred during energy transmission and distributioniii.Smart Meters are a critical component of many of these efforts and analysts estimate that there will be 100 million smartmeters deployed in the next 5 years. In North America alone, there are currently initiatives under way by utilities to place 41million smart meters in households. Up to half of the global smart meters being deployed are estimated to be integrated intohome energy management systems.To reach its full potential in reducing home power usage and also shifting power usage to off-peak periods, consumers needa display and control unit that can communicate both with the meter and appliances within the home. These display andcontrol units are referred to as In-Home or Intelligent Home Displays (IHDs) and are central to successful home energy man-agement systems. There are technological and political trends that are driving the use of home energymanagement in order to reduce consumption and lower peak demand. The commitment to rolling out “smart” appliancesby manufacturers such as GE and Whirlpool is one such driver. These smart appliances can be electronically controlled,allowing for devices such as the home energy management system to limit any unnecessary usage and to shift usage fromtimes of peak electricity demand to off-peak hours.Intel Corporation and IDEO have collaborated to develop an Intelligent Home Energy Management System (IHEM) whichshowcases the potential benefits of home energy management systems. Wipro analysts have assessed the features andcapabilities of this IHEM and modeled its potential impact on both consumers and utilities. Working from published casestudies, trials, and academic studies, Wipro developed a model to assess: • The potential reduction in consumer energy consumption • The potential reduction in consumer use of peak energy • The corresponding decrease in needed electricity supply • The environmental and dollar cost savings resulting from these savingsOur assessment is based on the impact of one million householdsiv implementing a fully functioning IHEM system.Wipro Consulting Business Transformation Practice page : 6 of 36
  • 7. Next Generation Home Energy Management Systems – A Mass Deployment ImpactIntelligent HOME ENERGY MANAGEMENT SYSTEMSMultiple studies, trials and proof of concepts have shown that providing consumers with information on their powerconsumption helps them to reduce energy use. In a 2006 review of trials, The Environmental Change Institute of theUniversity of Oxford cited average energy consumption reductions of as much as 20% from providing consumers with moreinformationv, with most studies falling in the 5% to 14% range. Similarly, a 2009 review of trials by the Brattle Groupvi showsa reduction in energy consumption of 3% to 13%, with an average of 7% percent. These trials used energy managementsystems and IHDs that are relatively simple in terms of the information displayed and attractiveness of the user interface. Theinformation typically displayed includes: • Current energy consumption (dollars or kilowatt hours) • Cumulative energy usage (dollars or kilowatt hours) • Temperature • TimeIntel Corporation and IDEO have collaborated to develop an IHEM that extends current smart metering and home energymanagement capabilities to invoke a consumer response based on the following principlesvii. 1. Quality of Life Improvements – Monitoring energy in and of itself is not enough of a reason to motivate people to save energy. In fact, successful IHEMs should not depend solely on saving money or reducing one’s environmental foot print. Rather, they should address other fundamental needs such as safety, comfort, connectedness, and individual control. 2. Actionable Information – To be more energy efficient, people need support. The IHEM has to spur consumers into action rather than simply provide interesting information. 3. Evolve and Adapt – To keep people engaged with the system, it needs to evolve over time. As the Brattle Group establishedxiii, IHD-based energy savings behaviors have not been tested for sustainability. While consumers may respond with initial enthusiasm and excitement, as the novelty of the system fades, the response may tail off. IDEO and Intel believe that the IHEM must therefore grow and adapt with users over time to ensure that it retains its relevance. The end goal is to make energy saving actions an innate aspect of consumer behavior so that they no longer need external incentives to motivate energy saving behavior. Next Generation IHEMs take advantage of the software and graphical capabilities to keep consumers involved, and help consumers to develop and foster a new sense of energy awareness.With these guiding principles in mind, IDEO developed a Next Generation IHEM system that includes the following corefeatures and capabilities: • Monitors Performance: The system displays current use information and collects appliance-specific inputs from smart plugs sitting between the appliance and the socket. In the future, these plugs will be replaced by corresponding functionality integrated directly into smart appliances. • Recommends Solutions: The IHEM gives consumers in-context reminders to reduce power consumption. For example, it might chime to recommend a cold wash rather than hot wash for clothes if the user has exceeded their usage targets, or it might recommend setting a timer to wash clothes during a low-demand period. • Sets Goals: The IHEM compares current consumption with historical and target consumption as well as aggregatedWipro Consulting Business Transformation Practice page : 7 of 36
  • 8. Next Generation Home Energy Management Systems – A Mass Deployment Impact information on other households. • Helps Users Reduce Energy Use: Simplicity is the key to successful implementation. The IHEM has a mode switch that allows users to select “Home,” “Away,” or “Asleep.” The user simply taps the touch-screen monitor on their way out of the house to set the entire system to “away” mode, and the home energy management system turns out the lights, shuts off or turns down the heating/cooling system, and so on. This centralized control minimizes the need for con- sumers to walk through their house to perform all of these tasks individually. Additionally, the IHEM has a very easy programmable thermostat interface, taking the pain out of setting thermostats and other power-hungry devices. It also integrates with energy storage devices, such as electric cars. • Rewards Success: While rewarding households who lower their energy use with discounts and cash incentives can be difficult to implement for regulated utilities, there are alternative schemes such as bonus points, energy saver miles, or carbon offsets which can be given as rewards. Utilities can set up ways to recognize virtuous energy savers by com- paring families against the neighborhood. The IHEM has the capability to track energy consumption against targets and communicate rewards. • Is Central to the Household: The Next Generation IHEM is a clock when not in use, and provides additional information such as temperature, all of which contribute to consumers checking the display several times per day. Woven into the interface are message alerts and an elegant display of peak time and peak usage. The software is built on open standards, allowing third party software application developers to develop tools for the IHEM. Wipro and IDEO envision a range of potential third-party applications that utilize the IHEM including video messaging, home health monitors, and integrated home security systems.The display on the IHEM is quite different from IHD systems found on the market today. Given the list of features andcharacteristics outlined above, Wipro analysts believe that the demand-response rates seen in empirical trials to date arelower than what we expect to see from IHEMs. In order to assess the potential impact Wipro assessed use cases, and thenprojected the impact of those use cases on a hypothetical user group of one million households.Note that the IHEM itself consumes a certain amount of power. However, it is designed with power efficiency in mind,making use of Intel® Atom™ processors. The Intel Atom™ processors were developed specifically with energy efficiency inmind, with very low average power and idle power.Wipro Consulting Business Transformation Practice page : 8 of 36
  • 9. Next Generation Home Energy Management Systems – A Mass Deployment ImpactThe Impact of Next Generation HEMs on Electricity ConsumptionOne of the key features which differentiates an IHEM from the offerings available today is the simplicity of control and biastowards action. Wipro’s modeling shows that the IHEM will allow consumers to reduce their powerconsumption by 31%. The assumptions of the model and calculations are shown below, but the savings stem from: • An average of 3,160 kWh reduction per US household enabled by mode switching • An average of 344 kWh reduction per US household enabled through information display remindersConsumption Reduction through Mode SwitchingThe simple mode switching of being able to set your house to “Home,” “Away,” or “Asleep” can save consumers 28% of theircurrent electricity consumption. The table below shows expected savings for a single family home. For example, by reducingthe in-home temperature from 72 degrees Fahrenheit to 65 degrees when out of the home or asleep, the homeowner saves576 kWh over the four coldest months, a saving of almost $70ix. Likewise by being able to ensure that all lights are turnedoff with one hit of the “Away” button as the homeowner is dashing out of the door, rather than conducting the ritual walk-through of the house turning off each individual light, the homeowner can reduce electricity used for lighting by 1,752 kWhover the year, resulting in a saving of $208. With a burgeoning middle class in growing economies, PCs, peripherals, and print-ers are becoming an increasingly important part of the overall IT and household carbon footprint. According to the SMART2020 report issued by the Climate Group of the Global e-Sustainability Inititative, PCs, peripherals, and printers will constitute57% of the estimated 1.4 gigatons of CO2 emissions attributable to information technology by 2020 (with data centers,telecom infrastructure and devices accounting for the remaining 43% of IT emissions). The ability to “mode switch” the entirehousehold into “away” mode will pay rising dividends by proportionately reducing the number of “energy vampires” in theform of charging stations, power adapters, and stand-by mode devices throughout the householdx. Energy Consumption Savings through Mode Switching Capability % of Using Savings / Watt Hours Per Days Per Total End Use Reduction Type Mode Electricity Year Savings Day Year (kWh) for End Use (US$) Lighting Turn off two light Away 300 16 365 100% 1,752 $207.79 fixtures with two Mode / 75W bulbs each. Sleep Mode Air Change in-home Away 480 8 90 82% 284 $33.72 Conditioning temperature from Mode 72 to 78 when away. Assumes A/C need for three peak summer months / year. Heating Lower in-home Away 700 16 120 43% 576 $68.29 temperature from Mode / 72 to 65 when not Sleep at home for peak Mode four winter months / year. Energy Turn consumer Away 100 15 365 100% 548 $64.93 Vampires xiWipro Consulting Business Transformation Practice electronics from Mode / page : 9 of 36 stand by to off or Sleep hibernation, cut Mode power to adapters not in use.
  • 10. fixtures with two Mode / 75W bulbs each. Sleep Mode Air Change in-home Away 480 8 90 82% 284 $33.72 Next Generation Home EnergyMode Conditioning temperature from Management Systems – A Mass Deployment Impact 72 to 78 when away. Assumes A/C need for three peak summer months / year. Heating Lower in-home Away 700 16 120 43% 576 $68.29 temperature from Mode / 72 to 65 when not Sleep at home for peak Mode four winter months / year. Energy Turn consumer Away 100 15 365 100% 548 $64.93 Vampiresxi electronics from Mode / stand by to off or Sleep hibernation, cut Mode power to adapters not in use. 3,126 $374.73 Figure 3. Source - Wipro Consulting ServicesNote: Costs are calculated at $0.1186 per kilowatt hour to reflect the current average price of electricity in the USxii.If these savings are analyzed on a monthly basis, in the summer there would be an average savings of 293 kilowatt hours permonth or around $35 per summer bill.. This assumes that lighting, air conditioning, and energy vampire benefits from Figure3 are realized over a 31 day period. On cold winter months, the average savings per house amounts to 344 kilowatt hoursper month or around $40. This assumes benefits from heating, lighting and energy vampires are gained over a 31 day period.In these peak summer and winter months, the model households in this study would be able to reduce their energy usagesignificantly and save on their electricity bills by using the mode switch capability.Consumption Reduction by Information Display and RemindersWipro anticipates that an additional 3% reduction in energy consumption will be generated through information displays andreminders. This savings is net cumulative beyond the savings enabled from the “away” and “asleep” modes. In this instancethe resident is at home, and the IHEM is set to the “home” mode – but, additional energy savings reminders from the IHEMscontribute to additional savings. For example, during a hot summer evening air conditioning is cycled on-off at the compres-sor for 50% of the time for three hoursxiii. Likewise home heating is reduced from 72 to 68 degrees Fahrenheit for four monthsduring the winter, again for three hours each evening.These savings add up to additional electricity consumption savings of 344 kWh for a typical US family, or a further $40.74 insavings per year.Wipro Consulting Business Transformation Practice page : 10 of 36
  • 11. Next Generation Home Energy Management Systems – A Mass Deployment Impact Energy Consumption Savings through Information Display, Reminders, and Centralized Device Control Total Savings / Use Scenario Reduction Type Mode (kWh) Year Lighting Turn off one light Home 55 6.49 fixture with two Mode 75W bulbs when at home. Air Conditioning A/C is cycled on-off Home 227 26.93 at compressor Mode 50% of time for three hours during evening demand peak. Assumes three months of A/C need per year. Heating Turn down in-home Home 62 7.32 temperature from Mode 72 to 68 degrees during three peak hours per day. Assumes four months of heating need per year. 344 40.74 xiv Figure 4. Source - Wipro Consulting ServicesFor a 31-day summer month, the benefits from reduced air conditioning and lighting usage would equate to an averagereduction in consumption of 79 kilowatt hours or a further $9 a month in bill savings per household. During the winter,reducing heating and lighting would save 21 kilowatt hours of electricity and around $2 per month per household. Makinguse of the advanced display and reminder features of the IHEM system to control the load of appliances as well as eliminatingwasted electricity usage when at home can lead to a further decrease in electric consumption and cheaper energy bills forresidents.Wipro Consulting Business Transformation Practice page : 11 of 36
  • 12. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAdditional Energy Conservation BenefitsThese percentages reflect an on-going reduction in energy use. Excluded from this analysis are one time benefits fromreplacing old and energy-inefficient home appliances. As an example, replacing a ten year old refrigerator with a new EnergyStar model can save on the order of $250 over 5 years according to the Energy Star Refrigerator Retirement Savings Calcu-latorxv. The IHEM shows a real-time breakdown of which appliances are consuming the most energy, and the system alsoshows comparisons with average and best-in-class appliances. For some consumers, this may be enough to trigger them toreplace their inefficient appliances with more efficient devices. It is envisaged that manufacturers will supply appliance ef-ficiency data, enabling not only the comparisons but also appropriate in-context marketing over the IHEM such as appliancerebates or promotional material on energy efficient appliancesxvi.Wipro Consulting Business Transformation Practice page : 12 of 36
  • 13. Next Generation Home Energy Management Systems – A Mass Deployment ImpactReduction in Grid Energy Demand from One Million HouseholdsWipro analysis shows that the deployment of the IHEM in one million US homes would result in a total reduction in annualelectricity consumption of 3,500 gigawatt hours. Reduction in Consumption due to IHD and Home Energy Management System # of Households 1,000,000 Average US Electricity Consumption per Household (MWh) 11.48 % of Electric Consumption Reduced 31% Reduction in Residential Electricity Consumption (MWh) 3,503,152 Reduction in Residential Electricity Consumption (GWh) 3,503Figure 5. Wipro Consulting Services and Energy Information AdministrationStudies have shownxvii that according to the average load profile of the US electricity generation system, 75% of electricityconsumption savings will directly impact electricity generated at natural gas power plants, and 25% will directly impact coalplants.If we take into account the efficiency of natural gas plantsxviii, the reduction in electricity consumption from these one millionIHEM powered homes leads to a reduction in burning of .02 quadrillion BTUs of natural gas. Putting this intocontext, the US used 31% of natural gas for electricity generation in 2008xix. Reducing natural gas use for energy generationfrees resources for other residential, commercial, and industrial uses. Natural Gas Consumption Offset Total Energy Generation Displacement (GWh) 3,748.4 % of Energy Conservation Offsetting Natural Gas 75% GWh to BTU Conversion (BTU / GWh) 3,412,141,630 Efficiency of Natural Gas Generation Technology - CTCC 47% Natural Gas Consumption Offset by Energy Conservation (billion BTU) 20.4 Natural Gas Consumption Offset by Energy Conservation (Quads) 0.0204 Figure 6. Wipro Consulting ServicesWipro Consulting Business Transformation Practice page : 13 of 36
  • 14. Next Generation Home Energy Management Systems – A Mass Deployment ImpactLikewise for coal, if we assume that coal plantsxx are 38% efficient in turning coal into electricityxxi, the reduction in electricityconsumption from these one million homes equipped with IHEMs avoids the burning of 0.008 quadrillion BTUs of coal. This isequivalent to about 371 thousand metric tons of coal or enough coal to fill over 4,000 railcars. Coal Consumption Offset Total Energy Generation Displacement (GWh) 3,748.4 % of Energy Conservation Offsetting Coal 25% GWh to BTU Conversion (BTU / GWh) 3,412,141,630 Efficiency of Natural Gas Generation Technology - CTCC 38% CoalConsumption Offset by Energy Conservation (billion BTU) 8.4 Average Heat Content of Coal (BTU / metric ton) 22,680,000 Metric Tons of Coal Offset by Energy Conservation (metric tons) 371,008 Metric Tons of Coal per Average Railcar (metric tons / railcar) 90.89 Railcars of Coal Offset by Energy Conservation 4,082 Figure 7. Source: Wipro Consulting ServicesThe significant reduction in electricity generation enabled by IHEMs will have a dramatic impact on carbon dioxide emissions: • A 3,500 GWh annual reduction in electricity consumption is equivalent to a reduction in annual CO2 emissions of 2.4 million tons (1.49 million tons from natural gas plants and .92 million tons from coal plants)xxii. • 2.4 million tons of CO2 is equivalent to the annual emissions from around 535,670 conventional cars. For a population of one million households, the impact of IHEMs is equivalent to taking over 535,670 cars off the road for a year. CO2 Emissions Impact of Energy Conservation Fuel Type Natural Gas Coal GWh of Fossil Fuel Electricity Generation Offset 2,811 937 MWh of Fossil Fuel Electricity Generation Offset 2,811,280 937,090 CO2 Emission Rate from Fossil Fuel Electricity Generation (metric tons / MWh) .53 .98 Metric tons of CO2 Emissions Offset 1,490,680 919,826 Figure 8. Source: Wipro Consulting ServicesWipro Consulting Business Transformation Practice page : 14 of 36
  • 15. Next Generation Home Energy Management Systems – A Mass Deployment Impact CO2 Emission Savings from Reducing Electricity Generation (CO2 metric tons) Natural Gas 919,826 38% 1,490,680 Coal 62% Figure 9. Source: Wipro Consulting ServicesCarbon Intensity: How Much Carbon Is In Your Megawatt?The amount of carbon dioxide emitted to produce one megawatt of electricity greatly depends on the fuel. For comparison,one megawatt hour of electricity is enough to power approximately 830 US single family homes for an hour. Generating onemegawatt in a natural gas-fired power plant generates 1,170 pounds of carbon dioxide while producing the same amount ofelectricity in a coal-fired plant emits 2,160 pounds of carbon dioxide. Nuclear, wind, solar, hydroelectric, and geothermal plantsproduce negligible amounts of carbon dioxide for each megawatt of power produced.Given this big difference in relative carbon footprint, the climate implications of reducing peak and base power demand aredramatically different by country depending on each nation’s power generating infrastructure. In France, for instance, thepercentage of electricity supplied by nuclear power is 78% while the corresponding figures are 19% for the US and only 2%for China. A 1% reduction in domestic power consumption through in-home power management systems may thus removethousands of tons of carbon dioxide from the national balance sheet for coal-generation intensive countries such as Chinawhile having a comparatively smaller impact in nuclear power intensive countries such as France or Japan.Wipro Consulting Business Transformation Practice page : 15 of 36
  • 16. Next Generation Home Energy Management Systems – A Mass Deployment ImpactReducing Energy Consumption at Times of Peak DemandThus far we have assessed the impact of IHEMs on the overall energy consumption of US households. In this next section wewill focus on how this technology can affect the consumption of electricity at times of peak demand.At peak times - the periods in a day in which total energy demand is high due to simultaneous use of electric appliances byend customers - utilities must fire up additional electric generators that are in reserve or squeeze extra capacity out of flexiblegenerators in order to meet electricity demand. Generating the energy to meet this extra demand is costly, and it can even-tually be passed on to the end customer through higher peak electricity prices. According to an E3 study for the CaliforniaPublic Utility Commission, California utilities can avoid as much as $160 in additional costs during summer peak periods byshifting one megawatt hour of generation to off-peak timesxxiii. By enabling households to reduce their peak-time energyconsumption through advanced features, the IHEM system can lead to electricity bill savings for the consumer and significantcost savings for utilities. Wipro estimates that the reduction in the use of electricity during peak times can lead to householdsavings on electricity of up to $55 per year. For utilities, the savings from not having to purchase or produce peak electricitydue to the reduction in peak demand through the IHEMs deployed in 1 million households for one year can be as much as$63 million.The features of the IHEM that can help offset the use of electricity during these peak periods are: • Advanced information display within the home: o The IHEM communicates with utilities so that it displays not only basic information such as peak periods, rates, household electricity load, and household electricity consumption, but also how much electricity is being used by the neighborhood or by the grid as a whole. This information serves as a way to raise awareness of electricity consumption during peak periods and the particular household’s contribution to overall peak load in the community. • Display-to-resident communication: o Households with IHEMs can be prompted to reduce electricity use during peak periods through customizable reminders. For example, chimes and visual reminders can be set to remind residents of when the peak periods will occur. Alarms can then go off during these periods combined with detailed recommendations on specific behaviors that can reduce peak electricity use such as waiting to use the dishwasher until off-peak times. • Centralized visibility and control of devices within the home: o The use of smart plugs and smart appliances allows consumers to monitor the status of devices with granular detail. This is all centralized in a single display, making it easy for consumers to know when unnecessary appliances are running. o Future smart appliances will be controllable through the IHEM, allowing for the scheduling and automatic execution of appliance tasks such as dishwashing at off-peak hours. The IHEM can enable automation of appliances to ensure usage minimizes electricity consumption and expenditure.These features of the IHEM work in harmony to make residents more aware of peak periods, to stimulate residents into takingenergy saving actions at these times, and to make it appreciably easier for residents to follow energy saving behavior.Wipro Consulting Business Transformation Practice page : 16 of 36
  • 17. Next Generation Home Energy Management Systems – A Mass Deployment ImpactThe Psychology of Saving Energy: Insights from Behavioral FinanceSaving energy is good for the pocket book and good for the planet. When designing energy savings programs, utilities can le-verage insights from behavioral economics on loss aversion and choice architecture to help consumers maximize their savingsand minimize their carbon footprint.tThe principle of loss aversion stipulates that people perceive a loss of a certain amount of money to be twice as impactful as again of the same magnitude, i.e. losing $100 will likely make you feel twice as bad as gaining $100 would make you happy. Toproperly frame an energy savings opportunity, an in-home display should alert users to ongoing energy losses produced byinefficient appliances rather than showing the savings potential.Efficient choice architectures take into account several drivers of human decision making behavior that result in preferencesfor the path of least resistance, automatic defaults, and ultimately a status quo bias. Automatic enrollment in 401(k) plans, forinstance, produces participation rates nearly twice as high as plans requiring active opt-in. To gain similar efficiencies in theenergy saving space, intelligent in-home displays and home energy networks could come pre-configured with peak-shiftingdefaults to encourage the use of energy-intensive appliances during off-peak hours.Modeling the Impact of IHEMs on Peak Energy ConsumptionThe informative and advanced reminder features of the IHEM system have the potential to dramatically reduce energyconsumption during peak times by allowing households to adopt a number of energy saving habits. Wipro’s model of theexpected impact of the IHEM on peak-time electricity consumption behavior can be seen in the table below:Wipro Consulting Business Transformation Practice page : 17 of 36
  • 18. Next Generation Home Energy Management Systems – A Mass Deployment Impact Peak Energy Load Shifting Savings through Personalized Information, Reminders, Centralized Device Visibility, and Control End Use Description Watts shifted Average Hours / % of House Using Total Peak of Behavioral Day Electricity for End Consumption Change Use Reduction per Year (kilowatt hours) Dish Washer Run dish 1,200 1.0 53% 232.1 washer in off-peak vs. on-peak hours. Air A/C is cycled 1,000 3.0 82% 227.1 Conditioning on-off at compressor 50% of time for three hours during evening demand peak. Assumes three months of A/C need per year. Heating Turning down 400 3.0 43% 61.7 in-home temperature from 72 to 68 degrees during three evening peak hours. Assumes four months of heating need per year. Lighting Turn off one 150 1.0 100% 54.8 light fixture with two 75W bulbs when at home. Clothes Washer Run clothes 500 0.1 79% 20.6 washer off-peak. Assumes five wash cycles per week, or .7 wash cycles of one hour each per day. Clothes Dryer Run clothes 3,000 0.1 57% 89.2 dryer off-peak. Assumes five drying cycles per week, or .7 drying cycles of 1.5 hours each per day. Total 685 Figure 10. Source: Wipro Consulting Services and Energy Information AdministrationWipro Consulting Business Transformation Practice page : 18 of 36
  • 19. Next Generation Home Energy Management Systems – A Mass Deployment Impact These IHEM-enabled behaviors result in an estimated reduction of peak electricity consumption of 685 kilowatt hours per household. Spread across a million homes, this totals a reduction of 685 gigawatt hours. Making an assumption in this scenario that the utility passes at least part of the cost of generating electricity during times of peak demand on to the customer so that the cost per kilowatt hour of electricity is 8 cents higher than off-peak times, the behavioral changes instigated by the use of the IHEM can be expected to save the household up to $55 annually. As dem- onstrated in Figure 11, this is in addition to the $415.47 in annual electricity bill savings due to overall reduction in electricity consumption as described in the previous section. The utilities can realize significant savings Advanced IHEM-enabled by avoiding the high cost associated with Household Electricity Bill Savings generating the extra energy needed to meet peak demand. According to a study by E3 for the California Public Utilities Com $54.83 mission, the cost benefit to the utility of Annual Savings from reducing 1 MWh of energy generation Consuming Less Electricity (calculated by month) can range from $58.38 Less Annual Savings from Using in less demanding months to $118.58 in $415.47 Electricity during Peak Hours midsummer months where energy consumption is high due to simultaneous use of air conditioningxxiv. Figure 11. Source: Wipro Consulting Services Cost Avoided per 1 Megawatt Hour of Energy Generation Reduction during Peak Periods $140.00Cost per Mwh (USD) $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Figure 12. Source: Energy and Environmental Economics, Inc. These values incorporate the cost of plant operation and maintenance to generate the megawatt, associated transmission and distribution costs, as well as environmental costs of the emitted pollutants. Based on this information, Wipro estimates that the deployment of one million IHEMs and the end-use behavioral changes that are brought about by the systems can save utilities up to $63 Million over a year in avoided operational cost at peak periods. Wipro Consulting Business Transformation Practice page : 19 of 36
  • 20. Next Generation Home Energy Management Systems – A Mass Deployment ImpactCapital Expenditure Reduction BenefitsIn the previous section, we explored the impact of IHEMs on household peak demand and the corresponding reduction inutility operating expenses to meet that peak demand. In this section, we explore the capital costs avoided by permanentlyreducing peak period demand.The capacity of the electricity generation infrastructure in the United States is planned and constructed to meet consumer-side peak electricity demand. Peak demand in the US is currently around 180% of average demand, meaning that a lot ofpower generation capability is built and sits idle except for the few weeks per year when it is needed. By reducing peak elec-tricity demand, older power plants on stand-by can be retired without creating capacity shortages, and future power plantsdo not need to be constructed quite as rapidly.As established in earlier sections of this paper, Wipro expects that the IHEM system will contribute to a reduction in peakresidential demand of 1.11 GW across one million homes. Reduction in Peak Demand # of Average US % of Peak Reduction in Reduction in Households Peak Demand Load Peak Demand Peak Demand per Household Reduced on Grid (kW) on Grid (GW) (kW) 1,000,000 3.38 33% 1,112,682 1.11 Figure 13. Source: Wipro Consulting ServicesIf we further consider the ability of IHEMs to act as a gateway to connect residential photovoltaic generators to the grid (seethe section in this report entitled The Impact of Photovoltaic Micro-Generation), these photovoltaic panels can offset an ad-ditional .0378 GW of peak residential demand that would otherwise burden the grid. This assumes 1.8% market penetrationof 3.5 kW photovoltaic systems by 2030xxv with an effective load carrying capacity of 60%xxvi.Taken together, this constitutes a 1.15 GW reduction in capacity requirements. If we think about this change in demand interms of coal-fired power plants that have capacities of 675 MW, this demand reduction is equal to: • The capacity of 2.13 coal-fired power plants. Assuming that coal-fired power plants are able to handle 80% of their 675 MW nameplate capacity during peak hours, 1.44 GW of nameplate generation capacity in coal plants would be needed to meet 1.15 GW in electric load. This translates into 2.13 675 MW plants. • $2.8 Billion in avoided capital costs. The average capital cost associated with one additional gigawatt in electric generation capacity using Supercritical Pulverized Coal technology with no carbon dioxide capture is $2.45 billion. A reduction in 1.15 GW of peak demand can mean a reduction in capital costs of $2.8Bn.Wipro Consulting Business Transformation Practice page : 20 of 36
  • 21. Next Generation Home Energy Management Systems – A Mass Deployment ImpactIf we think about this change in demand in terms of combined cycle gas-turbine power plants that have capacities of250 MW, this demand reduction is equal to: • The capacity of 5.75 natural gas plants (assuming that natural gas power plants are able to handle 80% of their 250 MW nameplate capacity during peak hours). • $.92 billion in terms of capital cost avoided.Wipro Consulting Business Transformation Practice page : 21 of 36
  • 22. Next Generation Home Energy Management Systems – A Mass Deployment ImpactThe Impact of Photo-voltaic Micro-generationA more active role in managing household energy consumption also includes an increasing emphasis on domestic micro-generation. This form of distributed electricity production benefits consumers, energy providers, and the environment in thefollowing key ways: 1) Solar electricity is free of charge to the consumer after amortizing the initial installation expense and once deployed, has zero carbon foot print. Efficient photo-voltaic systems can also be used to feed surplus electricity back into the grid and accelerate the panels’ amortization schedule through energy credits that are calculated based on the system’s net output capacity 2) In hot climates, the maximum output window of photovoltaic systems largely overlaps times ofxxvii peak demand, especially for energy-intensive applications like air-conditioning that often spike in the late afternoon and early evening hours 3) Most of the locally produced electricity is consumed within a few feet of its source and thus eliminates the additional 7% of peak production required to account for in-grid transmission lossesWipro evaluated the potential for utility power production savings from photo-voltaic micro-generation (solar panels) andestimates a cumulative savings potential across 1 million households of 105 gigawatt hours. These numbers assume anestimated household penetration of only 1.8% of single-family homes.xxviiiEven with less than 2% of homes contributing to photo-voltaic micro-generation, the resulting reduction in carbon emissionsamounts to 74,708 metric tons of CO2 which has the equivalent CO2 emissions impact of taking 16,600 cars off the road.Changes in government regulations, more aggressive monetary and tax incentives, and breakthroughs in energy conver-sion technology could lead to a much more rapid growth in solar panel inventory for micro-generation. Assuming 10% totalpenetration within a market of 1 million homes, photo-voltaic generation could achieve a total output of 583 gigawatt hourscorresponding to a reduction of CO2 emissions of 4.15 million tons or the emissions equivalent of 922,320 cars.IHEMs can play a crucial role in the management, billing, and crediting of solar power. The home energy management solu-tion could calculate the optimal mix of grid versus photovoltaic power to blend the needs of in-homeenergy consumption with the potential higher revenue of contributing solar energy to the grid during times of higherdemand. In addition, an intuitive user interface can provide immediate and valuable feedback about the relative carbonfootprint of the user’s home for further fine tuning of consumption patterns.Wipro Consulting Business Transformation Practice page : 22 of 36
  • 23. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAdditional Operational Benefits for UtilityWhile this whitepaper and model have largely been focused on the consumer and utility cost savings as well as societalbenefits of reduced carbon dioxide emissions, IHEMs have additional operational benefits for the utility. Smart metering, anenabling technology for home energy management, provides numerous benefits including: • Elimination of meter reading costs • Improved electricity transmission and distribution planning • Heightened billing accuracy • Faster detection of outages • Remote disconnect capabilities • Call center savingsIn trials such as the California PG&E smart metering application, 68% of the benefits of smart metering were derived fromavoided meter reading costs. A further 11% of the benefit resulted from improved billing and 2% from the reduction in callcenter volumexxix. IHEMs will not add any additional benefit to the reduction in meter reading costs or outage detection.However, by providing consumers with regular communication and information and by providing a rich interface with manyopportunities to provide timely messages, suggestions, and advice, the IHEM has the capacity to reduce billing related que-ries and issues, and to provide a better and more personal experience of the utility.Wipro Consulting Business Transformation Practice page : 23 of 36
  • 24. Next Generation Home Energy Management Systems – A Mass Deployment ImpactConclusions and RecommendationsField trials and early deployments have shown the benefits of home energy management systems and the additional impactof giving consumers timely and relevant information through in-home displays. As utilities roll out smart meter deployments,the return on the infrastructure investment is greatly amplified by these devices. The current generation of simple IHDs haveresulted in a reduction in electricity use of up to 20%. More advanced models, such as Intelligent Home Energy ManagementSystems offer consumers much greater control and convenience, making energy reduction the path of least resistance forconsumers. We estimate that these types of advanced systems that promote and enable simple energy saving actions willreduce energy consumption in a typical North American single family home by 31%. For typical North American home users,the additional savings enabled by IHEMs outweigh the cost of the system, hence if a utility is investing in smart metering andenergy management infrastructure, we recommend evaluating advanced systems.Moreover, the technology for smart meters and home energy management systems is rapidly evolving. As smart plugs andappliances, micro generation, and power storage through the use of electric cars become more common, the demands onhome energy management systems will increase. Utilities, home builders and consumers should prepare for these emergingrequirements by ensuring that their home energy management systems can scale up to meet these requirements.Wipro Consulting Business Transformation Practice page : 24 of 36
  • 25. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAppendix I – Modeling AssumptionsWipro analysts drew on multiple secondary sources and publications to develop a model to assess the impact of IHEMs onone million households. This appendix will cover the assumptions and equations used to estimate the benefits of IHEMsdiscussed in this report.Assumptions about the US HouseholdThe end-customer household referred to in this paper is based on the average US household today. The following assump-tions were made about this household: • Average household electricity consumption of 11.48 MWhrs per yearxxx • Market penetration of electric appliances across 1 million households based on the following profilexxxi: % of Households Using Electricity for End Use Dishwasher Clothes Dryer Clothes Washer Other Appliances and Lighting Refrigerators Water Heating Air Conditioning Space Heating 0% 20% 40% 60% 80% 100% Figure 14. Source: Energy Information Administration 2005 Residential Energy Consumption SurveyWipro Consulting Business Transformation Practice page : 25 of 36
  • 26. Next Generation Home Energy Management Systems – A Mass Deployment Impact • Peak demand of the average household based on the following profilexxxii Average US Household Peak Demand Profile (kilowatts) Personal Computers, 0.01 Color TV, 0.03 Other User, 0.1 Clothes Dryers, 0.1 Lighting,Clothes Washers, 0.01 0.34 Cooking, 0.03 Dishwashers, 0.03 Refrigerators, 0.33 Freezers, 0.01 Air Conditioning, Water Heating, 1.95 0.42 Furnace Fans, 0.02 Figure 15. Load Profile for Average US Household at Peak TimeWipro Consulting Business Transformation Practice page : 26 of 36
  • 27. Next Generation Home Energy Management Systems – A Mass Deployment Impact • Residential energy usage shifted away from or reduced at peak times follows the Peak Energy Shifting Model: Peak Energy Shifting Model Electricity Use Type Watts Average % of House- kWh / per month Total Shifted Hours / holds Using in Day Electricity Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec for End Use Dish Washer Run dish 1,200 1.0 53% 19.7 17.8 19.7 19.1 19.7 19.1 19.7 19.7 19.1 19.7 19.1 19.7 232.1 washer in off-peak vs. on-peak hours. Air A/C is cycled 1,000 3.0 82% 74.0 76.5 76.5 227.1 Conditioning on-off at compressor 50% of time for three hours during evening demand peak. Assumes three months of A/C need per year. Heating Turning down 400 3.0 43% 15.9 14.4 15.4 15.9 61.7 in-home temperature from 72 to 68 degrees during three evening peak hours. Assumes four months of heating need per year. Lighting Turn off one 150 1.0 100% 4.7 4.2 4.7 4.5 4.7 4.5 4.7 4.7 4.5 4.7 4.5 4.7 54.8 light fixture with two 75W bulbs when at home. Clothes Washer Run clothes 500 0.14 79% 1.7 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 20.6 washer off-peak. Assumes five wash cycles week, or .7 wash cycles of one hour each per day. Clothes Dryer Run clothes 3,000 0.14 57% 7.6 6.8 7.6 7.3 7.6 7.3 7.6 7.6 7.3 7.6 7.3 7.6 89.2 dryer off-peak. Assumes five drying cycles per week, or .7 drying cycles of 1.5 hours each per day. Total kWh shifted / month 49.8 44.8 33.7 32.6 33.7 106.6 110.2 110.2 32.6 33.7 48.0 49.6 685.4 Figure 16. Residential Peak Energy Shifting ModelWipro Consulting Business Transformation Practice page : 27 of 36
  • 28. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAssumptions about Photovoltaic MicrogenerationCalculations involving savings from photovoltaic microgeneration within IHEM-enabled residences use the followingassumptions: • The conservative scenario uses 1.8% market penetrationxxxiii across 1 million homes while the aggressive scenario uses 10% market penetration • The capacity of deployed PV systems was assumed to be 3.5 KW • The effective load carrying capacity of PVs was assumed to be 60%xxxiv • The average annual capacity factor of PVs was assumed to be 19%xxxvAssumptions about Utilities and Power GenerationThe following assumptions were made about the US electric generation infrastructure: • Following the load shape of the US electric generation system, 75% of energy consumption reduced by the impact of IHEMs will offset natural gas-based electric generationxxxvi • Following the load shape of the US electric generation system, 25% of energy consumption reduced by the impact of IHEMs will offset coal-based electric generationxxxvii • Capacity factor of natural gas and coal-based electricity generation is 80%xxxviii • 1 gigawatt hour of energy is equal to 3.41 x 10^9 BTUs of energy • Efficiency of coal-based electricity generation is 38%xxxix • Efficiency of natural gas-based electricity generation is 47%xl • Capital cost per 1 kilowatt of natural gas-based electric generation capacity is $800xli • Capital cost per 1 kilowatt of coal-based electric generation capacity is $2450xliiAssumptions about CO2 EmissionsThe following assumptions were used in estimating the CO2 emissions benefits in this report: • Average emissions rate from natural gas-based electricity generation is 1,169 lbs/MWhxliii • Average emissions rate from coal-based electricity generation is 2,164 lbs/MWhxliv • Average annual carbon dioxide emissions from a conventional car is 4.5 metric tonsxlvEquations for Benefits CalculationsThe following equations were used to calculate the benefits estimated in this paper. The inputs for these equations are foundin the assumptions defined in this appendix as well as the Wipro energy consumption savings models described in the bodyof the report.Wipro Consulting Business Transformation Practice page : 28 of 36
  • 29. Next Generation Home Energy Management Systems – A Mass Deployment ImpactSavings to End CustomersAnnual Electric Bill Savings from Using Less Energy:[(Energy Consumption Reduction from Mode Switch Capability per Year per Household) + (Energy Consumption Reductionfrom Information Display, Reminders and Centralized Device Control per Year per Household)] * (Average Residential Cost ofElectricity)Annual Electric Bill Savings from Reduced Electricity Usage at Peak Times:(Total Peak Consumption Reduced per Year per Household) * [(Peak Residential Cost of Electricity) – (Average Residential Costof Electricity)]Wipro Consulting Business Transformation Practice page : 29 of 36
  • 30. Next Generation Home Energy Management Systems – A Mass Deployment ImpactSavings to UtilitiesAvoided Annual Peak Energy Generation Costs:[(# of households deploying IHEM) * (Total Peak Consumption Reduced in January) * (Cost Avoided per unit of peak Energyin January)] + [(# of households deploying IHEM) * (Total Peak Consumption Reduced in February) * (Cost Avoided per unitof peak Energy in February)] + … + [(# of households deploying IHEM) * (Total Peak Consumption Reduced in December) *(Cost Avoided per unit of peak Energy in December)] • Monthly Assumptions: Assumptions for Utility Side Cost Avoided from Reduction in Peak Energy Usage Total kWh shifted or reduced / $ benefit per avoided mWh month / household during peak time January 49.6 $88.47 February 44.8 $84.23 March 33.7 $80.50 Apil 32.6 $86.08 May 33.7 $67.09 June 106.6 $58.38 July 110.2 $107.91 August 110.2 $118.58 September 32.6 $105.21 October 33.7 $108.87 November 48.0 $90.60 December 49.6 $93.01 Figure 17. Avoided Costs for Utilities from Reduction in Peak Energy UsageWipro Consulting Business Transformation Practice page : 30 of 36
  • 31. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAvoided Burning of Fossil Fuels:(# of households deploying IHEM) * [(Energy Consumption Reduction from Mode Switch Capability per Year per Household) +(Energy Consumption Reduction from Information Display, Reminders and Centralized Device Control per Year per House-hold)] * (% of energy reduction offsetting particular type of fossil fuel energy generation) * [1 + (% of Energy Lost in Transmis-sion and Distribution for Centralized Fossil Fuel Generation)] / (efficiency of fossil fuel generation technology)Carbon Dioxide Emissions Avoided:(# of households deploying IHEM) * [(Energy Consumption Reduction from Mode Switch Capability per Year per Household) +(Energy Consumption Reduction from Information Display, Reminders and Centralized Device Control per Year per House-hold)] * (% of energy reduction offsetting particular type of fossil fuel energy generation) * (emissions rate from fossil fuelgeneration technology) • For total carbon dioxide emissions avoided, the outputs of the above formula for both coal and natural gas were summed.Reduction in Necessary Peak Capacity from IHEMs:(# of households deploying IHEM) * (Average Household Peak Demand) * (% of Peak Load Reduced by IHEM functionality andTime of Use Pricing)Reduction in Necessary Peak Capacity from IHEM connected Photovoltaic Micro Generation:(# of households deploying IHEM) * (Market Penetration of PV in IHEM Deployed Households) * (Capacity of average PVsystem) * (Effective Load Carrying Capacity of PV Systems) • This reduction in necessary peak capacity from IHEM connected PV systems was added to the reduction in necessary peak capacity from IHEMs to estimate total capacity reduction benefits in this paper.Wipro Consulting Business Transformation Practice page : 31 of 36
  • 32. Next Generation Home Energy Management Systems – A Mass Deployment ImpactAppendix II – Consumer Fact SheetWipro analysts predict that the greatest savings from energy management systems with advanced in-home displays willcome from heating, air conditioning, lighting, and energy vampires. • As shown in figure 18, heating and cooling made up almost 1/3 of US energy use by residential consumers in 2006. Using the mode switch on the IHEM to tell the system you are “Away,” the energy management system will make minor temperature adjustments to reduce energy use. • Lighting is the fourth largest energy user in the home, but offers opportunity for savings with the mode switch. If you forget to turn off a couple of lights when you go out, the energy management system can do it for you. • Energy vampires include battery rechargers that are not in use but left plugged in and appliances in standby mode. 2006 Residential Primary Energy End Use Computers, 1.0% Other, 3.6% Cooking, 4.7% Adjust to SEDs, 5.7% Water Clean, 6.2% Refrigeration, Space Heating, 8.1% 26.4% Electronics, 8.1% Lighting, Space 11.6% Cooling, Water 13.0% Heating, 12.5% Figure 18. Source: Building Energy Data Book 2008As consumers, most of us are unaware of which appliance uses the most energy. The list below, shows some common ap-pliances and how much energy they use when active, idle, or off. Some appliances such as coffee makers use a lot of powerwhen active, but are only active for a few minutes per day costing a reasonable $5.45 per year. Others such as incandescentlight bulbs are left on for so long, and we have so many of them in a house, that the costs add up over a year. IHEMs bringthis sort of information alive by showing you which appliances are costing you the most money, and finding ways in whichyou can conserve energy and save.Wipro Consulting Business Transformation Practice page : 32 of 36
  • 33. Next Generation Home Energy Management Systems – A Mass Deployment Impact Annual Annual Power Draw (Watts) Use (hours / year) Consumption Cost ($) Active Idle Off Active Idle Off (kWh/year) Kitchen Coffee Maker 1,000 70 0.4 38 229 8,493 58 5.45 Dishwasher 0.332 0 365 0 120 11.28 Microwave Oven 1,500 0 3 70 0 8690 131 12.31 Refrigerator-Freezer 660 62.04 Freezer 470 44.18 Lighting 18-W Compact Fluorescent 18 0 0 1,189.4 0 0 20 1.88 60-W Incandescent Lamp 60 0 0 671.6 0 0 40 3.76 100-W Incandescent Lamp 100 0 0 671.6 0 0 70 6.58 Torchiere Lamp-Halogen 300 0 0 1,460 0 0 440 41.36 Bedroom and Bathroom Hair Dryer 710 0 0 50 0 0 40 3.76 Waterbed Heater 350 0 0 3,051 0 0 1,070 100.58 Laundry Room Clothes Dryer 359 1,000 94.00 Clothes Washer 0.276 0 0 392 0 0 110 10.34 Home Electronics CPU & Monitor 182/30 0 1,337 / 0 260 24.44 632 Stereo Systems 33 30 3 1510 1810 5440 119 11.19 Television 113 3.9 1,460 7300 193 18.14 Analog. <40” 86 1,095 184 17.30 Analog. >40” 156 1,825 312 29.33 Digital, ED/HD TV. <40” 150 1,095 301 28.29 Digital, ED/HD TV. >40” 234 1,825 455 42.77Wipro Consulting Business Transformation Practice page : 33 of 36 Set-top Box 20 0 20 6,450 0 2,310 178 16.73 DVD/VCR 17 13 3.3 170 5150 3430 78 7.33
  • 34. Home Electronics CPU & Monitor 182/30 0 1,337 / 0 260 24.44 632 Next Generation Home Energy Management Systems – A Mass Deployment Impact Stereo Systems 33 30 3 1510 1810 5440 119 11.19 Television 113 3.9 1,460 7300 193 18.14 Analog. <40” 86 1,095 184 17.30 Analog. >40” 156 1,825 312 29.33 Digital, ED/HD TV. <40” 150 1,095 301 28.29 Digital, ED/HD TV. >40” 234 1,825 455 42.77 Set-top Box 20 0 20 6,450 0 2,310 178 16.73 DVD/VCR 17 13 3.3 170 5150 3430 78 7.33 Heating and Cooling Dehumidifier 600 0 1,620 0 970 91.18 Furnace Fan 295 0 1,350 0 400 37.60 Ceiling Fan (only fan motor) 35 2,310 81 7.61 Water Heating Water Heater - Family of 4 4,500 64.3 N.A. 0 4770 448.38 Water Heater - Family of 2 4,500 32.15 N.A. 0 2,340 219.96 Portable Spa 4,350 275 0 25 8,735 0 2,525 237.35 Miscellaneous Pool Pump 1,000 0 792 0 790 74.26 Well Pump 725 0 115 0 80 7.52 Total Standby 0 57 0 8,760 500 47.00 xlvi Figure 19. Energy Use by Typical Home Appliances. Source: Building Energy Data BookWipro Consulting Business Transformation Practice page : 34 of 36
  • 35. Next Generation Home Energy Management Systems – A Mass Deployment Impacti For a discussion on energy efficiency as an energy resource, see McKinsey Global Energy and Materials report – Unlocking Energy Efficiency in the U.S. Economy. McKinsey estimates that a national, holistic approach across America’s 100M buildings and billions of devices would yield $1.2 trillion for $520Bn in upfront investment, an average of $12,000 per building.ii See Faruqui, Sanem Sergici and Ahmed Sharif, The Impact of Informational Feedback on Energy Consumption – A Survey of The Experimental Evidence, 2009 and Sarah Darby, The Effectiveness of Feedback on Energy Consumption, April 2006 for review.iii World Energy Outlook: India’s Energy Prospects – Reference Scenario; Central Electricity Authority (2007), Seventeenth Electric Power Survey, Ministry of Power, Government of India.iv Our model assumes these 1 million households follow an average US household consumption pattern for power, and use electricity and gas to power their homes. Utilities need to adjust the model if they service large numbers of consumers in apartments, or other lower energy consuming households. Likewise, there will be regional variations due to climate, energy source, etc.v Sarah Darby, The Effectiveness of Feedback on Energy Consumption, April 2006.vi Ahmad Faruqui, Sanem Sergici and Ahmed Sharif, The Impact of Informational Feedback on Energy Consumption – A Survey of The Experimental Evidence, 2009.vii IDEO Primary Research, 2009.viii Ahmad Faruqui, Sanem Sergici and Ahmed Sharif, The Impact of Informational Feedback on Energy Consumption – A Survey of The Experimental Evidence, 2009.ix Cost per kWh estimated at $0.1186, source: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.htmlx SMART 2020: Enabling the low carbon economy in the information age, The Climate Group, Global e-Sustainability Initiative.xi Note that there will be some initial effort or investment required to set up an environment where energy vampires can be reduced or eliminated.xii Source: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.htmlxiii The Baltimore Gas and Electric Smart Energy Pricing Pilot, Ahmed Faruqui and Sanem Sergici, April 28, 2009.xiv Energy consumption reduction for residents at home is taken from lighting, air conditioning, and heating figures from Peak Energy Shifting Model seen in the Appendix I.xv Energy Star Refrigerator Retirement Savings Calculator output assumes the replacement of a refrigerator with a top freezer configuration that was made between 1993 and 2000, and has a capacity of 19 to 21.4 cubic feet. The price of electricity was assumed to be 11.1 cents per kilowatt hour. The calculator can be found at http://www.energystar.gov/index.cfm?fuseaction=refrig.calculator.xvi Guidelines for appropriate marketing on IHDs is already being discussed in regulatory body advisory documents such as the National Consumer Council Report by Gill Owen and Judith Ward, The Consumer Implications of Smart Meters, July 2008xvii S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Connors et al (2005)xviii Natural gas plants are 47% efficient at turning natural gas into electricity according to the Electric Power Research Institute Program on Technology Innova tion: Integrated Generation Technology Options.xix US Energy Information Administration, Natural Gas Year in Review, April 2009.xx We are assuming this is a Supercritical Pulverized Coal (SCPC) plant with no CO2 Capture.xxi EPRI, Program on Technology Innovation: Integrated Generation Technology Options.xxii Assumes that 1KwH of electricity triggers 712g of CO2 emissions. Source: Google Power Meter assumptions from US EPA 2005 (http://www.google.org/ powermeter/calculation.html)xxiii Energy and Environment Economics Inc, Avoided Cost Model for the California Public Utility Commission.xxiv Energy and Environmental Economics Inc, Avoided Cost Model for the California Public Utility Commission. Values are modeled for California.xxv Energy Information Administration, US EIA Annual Energy Outlook 2009.xxvi S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Perez et al (2006).xxvii There is a carbon footprint associated with the manufacture, transportation and deployment of Photovoltaic cells which is not included in this analysis.xxviii US Energy Information Administration, Annual Energy Outlook 2009.xxix PG&E CPUC AMI Filing, July 2006.xxx Energy Information Administration, 2005 Residential Energy Consumption Survey.xxxi Market penetration figures for Clothes Washers/dryers and Dishwashers obtained from http://www.eia.doe.gov/emeu/reps/appli/all_tables.html, all other figures are from the 2005 Residential Energy Consumption Survey by the Energy Information Administration.xxxii EPRI, Assessment of Achievable Potential from Energy Efficiency and Demand Response Programs in the US (2010-2030), 2009xxxiii 1.8% is estimated US market penetration for residential photovoltaic systems in 2030 in Annual Energy Outlook 2009 by the US Energy Information Administration.xxxiv S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Perez et al (2006).xxxv S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Perez et al (2006).xxxvi S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Perez et al (2005).xxxvii S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing Connors et al (2005).xxxviii Capacity factor for Combined Turbine Combined Cycle (natural gas) and Supercritical Pulverized Coal technology from Program on Technology Innovation: Integrated Generation Technology Options by EPRIWipro Consulting Business Transformation Practice page : 35 of 36
  • 36. Next Generation Home Energy Management Systems – A Mass Deployment Impactxxxix Efficiency for Pulverized Coal technology in Program on Technology Innovation: Integrated Generation Technology Options by EPRI.xl Capacity factor for Combined Turbine Combined Cycle (natural gas) technology in Program on Technology Innovation: Integrated Generation Technology Options by EPRI.xli Capital Cost for Combined Turbine Combined Cycle (natural gas) technology in Program on Technology Innovation: Integrated Generation Technology Options by EPRI.xlii Capital Cost for Pulverized Coal technology in Program on Technology Innovation: Integrated Generation Technology Options by EPRI.xliii S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing ECONNorthwest eGRID 2006.xliv S. Grover, Energy, Economic, and Environmental Benefits of the Solar America Initiative citing ECONNorthwest eGRID 2006.xlv Google, Google Power Meter Calculations and Sources page citing data from US EPA.xlvi 1) Power draw will vary due to appliance components and modes of operation. 2) $0.096/kWh. 3) Excludes electricity for water heating and drying. 4) Cycles/year. 5) TVs <40” are estimated on 3 hours/day and TVs >40” are estimated on 5 hours/day. 6) Gallons/day. BTS/A.D. Little, Electricity Consumption by Small End Uses in Residential Buildings, Aug. 1998, Exhibit 6-8, p. 6-10 for clothes washer, computer, dehumidifier, dishwasher, furnace fan, pool pump, torchiere lamp-halogen, waterbed heater, and well pump; LBNL, Energy Data Sourcebook for the U.S. Residential Sector, LBNL-40297, Sept. 1997, p. 100-102 for clothes dryers, Table 10.2, p. 108 for lighting, and p. 62-67 for water heaters; LBNL, Miscellaneous Electricity Use in the U.S. Residential Sector, LBNL-40295, Apr. 1998, Appendix D for hair dryers; EIA, Supplement to AEO 2008, June 2008, Table 21 for refrigerator and freezer; GAMA, Consumers’ Directory of Certified Efficiency Ratings for Heating and Water Heating Equipment, Apr. 2000 for water heater power draw; EIA/TIAX, Commercial and Residential Sector Miscellaneous Electricity Consumption: FY2005 and Projections to 2030, Sept. 2006, p. 41-60 for coffee maker, microwave oven, stereo systems, TVs, set-top box, DVD/VCR, ceiling fan, and portable spa; and LBNL for total standby.Wipro Consulting Business Transformation Practice page : 36 of 36