Smart Meters: Global Regulatory Trends

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Keynote address for Metering Latin America delivered Oct. 25, 2011 by Chris King, Chief Regulatory Officer, eMeter Inc.

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Smart Meters: Global Regulatory Trends

  1. 1. Smart Meters: Global Regulatory TrendsChris King, Chief Regulatory OfficerOctober 2011 Copyright © 2011 eMeter Corp. All rights reserved.
  2. 2. eMeter brief introduction Company C Business B i • Corporate headquarters in • Smart meter and smart grid Silicon Valley software - Teams in Europe, India, Asia- d • O Operates in utility b k l back Pacific (Australia/China) office • Executive team average 25 • AMI/Meter vendor-neutral y years experience p • Embrace system integrators - Enterprise software and other business partners - Metering and communicationsSlide 1 Copyright © 2011 eMeter Corp. All rights reserved.
  3. 3. eMeter s eMeter’s customers: in production, at scale around the world The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again. The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.Slide 2 Copyright © 2011 eMeter Corp. All rights reserved.
  4. 4. Global utility industry b y y Utilities • 2 7 billion electric, gas, and water meters 2.7 electric gas • 12,000 electric utilities • About 6,000 with more than 30k customers , • 12% automated with AMR or AMI • 140 million smart meters – interval data, two-way communications Ownership – often a mix • National governments • Municipalities • Investors (IOUs) • Member cooperatives in U.S.Slide 3 Copyright © 2011 eMeter Corp. All rights reserved.
  5. 5. Utility Core Drivers y “All politics is local” • Politics - Utilities -> Regulators -> Politicians -> Consumers - “Reliable service at low cost” - Reliability = both generation and distribution • Managing political and financial risk - Over-build - Own and control - Avoid headlines • Ratesetting - For expenses, dollar-for-dollar recovery - For rate base, capital recovery plus ROE (IOUs only) - Higher sales = higher profitsSlide 4 Copyright © 2011 eMeter Corp. All rights reserved.
  6. 6. Current regulatory drivers g y • Policy goals - Economic growth/cleantech - Energy security - Utility efficiency and reliability - Global warming g - Reliable energy at low cost • Policies that drive smart grid adoption - Renewable resource targets, including distributed generation - Energy savings targets - State/national deployment mandates - Financial incentives for utilities - Electric vehicles • Th These policies are l li i largely i place l in lSlide 5 Copyright © 2011 eMeter Corp. All rights reserved.
  7. 7. Smart grid benefits for water utilitiesHow do advanced metering & meter datamanagement improve th system? ti the t ? • Improve accuracy & immediacy of metering information therefore revenue & customer service • Reduce Non-Revenue Water (NWR – about 40% in Brazil) - Detect unauthorized consumption - Detect leaks - Identify failed meters and registers • Life extension • Lower investment requirements • Tracking infrastructure cost • P Pressure management t Brazil Water Regions
  8. 8. Smart meter market drivers • North America - U.S. state initiatives - Renewable resources and energy savings targets - Keeping up with the crowd • Europe - EU directives - Renewable resources (e.g. Scandinavia, Spain, Germany) - Energy savings targets (e.g. UK) - G id modernization and efficiency (Eastern Europe) Grid d i ti d ffi i (E t E ) • China and India - Global political positioning - E Energy th ft i India theft in I di • Latin America - Supply adequacy (hydro risk, e.g. 2001 drought) - Di t ib ti Distribution reliability (16 h li bilit hours per year) ) - Energy theftSlide 7 Copyright © 2011 eMeter Corp. All rights reserved.
  9. 9. Smart grid business case summary – societal perspective i t l ti Annualized Savings and Costs for U.S. $80 ons of Dollars $70 $60 $50 $ D $40 $30 Billio $20 $10 $0 Source: eMeter Strategic ConsultingSlide 8 Copyright © 2011 eMeter Corp. All rights reserved.
  10. 10. International • European Union - New draft Energy Efficiency Directive this summer - Provides concrete steps to achieve 2020 and 2022 goals for smart meters • U.K. - 100% rollout required by 2019 - Central data agency (“Data Communications Company”) - Retailers moving forward now on “foundation” solutions foundation - Smart meter installation schedule begins second half 2012 • Scandinavia - Norway: smart meter rollout by 2016 - Finland: by 2013 • France - French regulator approved smart meter business case last month - Government endorsed rollout last month; complete by 2018 • Germany - New energy legislation in progress; smart meters being discussed • Brazil - Regulator planning decision/announcement soonSlide 9 Copyright © 2011 eMeter Corp. All rights reserved.
  11. 11. Smart meter policy map – world See U.S. Rollout by 2020 100% 80-100% 50-80% 0-50% 0%Slide 10 Copyright © 2011 eMeter Corp. All rights reserved.
  12. 12. Smart meter policy map – U.S. Rollout by 2020 100% 80-100% 50-80% 0-50% 0%Slide 11 Copyright © 2011 eMeter Corp. All rights reserved.
  13. 13. Consumers want information and pricing choices 100% 80% 60% 40% Favor time‐based  prices 20% Desire more energy  D i usage data 0% Source: PSE, Accenture Power Perceptions, Zpryme, GenesisSlide 12 Copyright © 2011 eMeter Corp. All rights reserved.
  14. 14. Information empowers choice p Enhanced information has been shown to help customers manage energy with knowledge of the cost implications of their choices. Relation of Value to Cost Control/ Options BenchmarksSlide 13 Copyright © 2011 eMeter Corp. All rights reserved.
  15. 15. PowerCentsDC smart grid survey g y Highest Interest is Usage  Consumers Want Data  by Appliance Pushed to Them 100% 81% 73% 76% 73% 75% 80% 71% 14% 56% 14% 60% 52% 40% 20% 20% 0% arisons pliance Daily usage Hourly usage Daily cost emails y alerts Weekly e sage by app Compa Energy With bill Mailed reports Utility website Email Us Source: Smart Meter Pilot Program, Inc.Slide 14 Copyright © 2011 eMeter Corp. All rights reserved.
  16. 16. Information feedback results b Results from 42 programs of different mechanisms, including in- home displays, websites, bill inserts, and mailed reports. Direct  Indirect  Feedback  Feedback  Programs Programs Total Programs Savings 3 3 20% 20% of peak,  1 1 weekdays 2 1 3 15‐19%, Mon‐Sat 8 6 14 10‐14% 11 3 14 5 9% 5‐9% 4 3 7 0‐4% Weighted average savings 9.4% Source: eMeter Strategic ConsultingSlide 15 Copyright © 2011 eMeter Corp. All rights reserved.
  17. 17. Pricing programs show energy users reduce peak g 11 10 9 8 Average of 20% 7 Frequency 6 5 4 3 2 1 - 0% to 2% 2% to 6% 6% to 10% 10% to 14% 14% to 18% 18% to 22% 22% to 26% 26% to 30% 30% to 34% 34% to 38% 38% to 42% 42% to 46% 46% to 50% 50% to 54% 54% to 58% % % % % % % % % % % % % % Source: Brattle Group Peak Reduction RangeSlide 16 Copyright © 2011 eMeter Corp. All rights reserved.
  18. 18. Smart meter data access • Free access to one’s own data already being collected - Online access to backhauled data within 48 hours of collection - Real time access to meter via home/building area Real-time network (HAN) interface • Ability to authorize third parties to receive the y p data - Trusted energy advisor • Data privacy and security protectionsSlide 17 Copyright © 2011 eMeter Corp. All rights reserved.
  19. 19. Data access & privacy Standards for data, price information, and control signals Utility Data Center Authorized Third Party Open p Meter Utility Utility Open ADE/ADR Internet Data Billing Web ADE/ Energy Energy Mgmt & CIS Site ADR Info Mgmt App App Smart Network Application Platform Communication Network Head End Internet Governed by data privacy & security rules Home Router Laptop p p Wi Fi T-stat AMI Radio Smart Smart Meter Radio Phone Communications HAN Network HAN Radio HAN (“Backhaul”) Radio Device OpenADR HAN RadioSlide 18 Copyright © 2011 eMeter Corp. All rights reserved.
  20. 20. Synthesis: Consumer’s Perspective y p “All the pieces are needed to make the smart grid work” Segments • Savers • Sustainers • Technophiles • I Ignorers Applications Consumers Applications • Energy information • Pricing choices • Convenience of automation Technologies Technologies • Smart meters and communications • Smart thermostats, lighting, appliances, equipment pp , q p • SoftwareSlide 19 Copyright © 2011 eMeter Corp. All rights reserved.
  21. 21. Policy recommendationsPolicymakers should have common vision of Smart Grid benefits: • Society • Financial savings and higher reliability via improved load factor and system efficiency g g y p y y • Faster and wider adoption of renewable energy and electric vehicles • Primary policy tool to achieve policy goals of reliable supply, energy savings, renewable portfolio standards, and emission reductions • Energy consumers • Access to detailed energy information • Voluntary time-based pricing options • Widespread availability of automated appliances and devicesPolicymakers should establish specific targets • Installation – e.g., 80% of meters in European Union by 2020, 100% by 2022 • Meter functionality – two-way communications, interval data, daily reads, HAN y y , , y , interface, disconnect switch, voltage & outage alerts • Promote but not mandate standards • Note: targets need to reflect country-specific requirements g y p q

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