This post was co-authored by Marcus Torchia and Usman Sindhu
Should smart metering serve the utility or the customer? What does customer “engagement” and “benefit” really mean? Advanced metering infrastructure (AMI) has opened up new opportunities - and new challenges - for the metering community.
Many customer facing utility programs have looked towards smart meters as an entry-point into the home. However, while the proliferation of smart meters has created a new avenue for consumer engagement, vendors, utilities, and regulators alike are still struggling to define the role of the consumer in the evolving smart grid. "Engagement" and customer "benefit" have become common regulatory themes in recent years, but different interpretations can lead to vastly different system specifications. From a smart metering perspective, a number of utility programs have piggybacked on the smart meter's core functionality as an implement for utility billing, either through analytics or through the use of the meter as a gateway for the delivery of data and control.
This dynamic is beginning to change - some vendors are experimenting with solutions implicitly designed as much around consumer engagement as billing. Two recent developments, a hybrid demand response/AMI solution offered by communications start-up Consert and Sensus' recent licensing of Navetas technology, are fully integrated with the smart meter.
Cellular Smart Meters for Demand Response
In the four years since the company was founded in 2008, Consert has signed commercial agreements with electric utilities representing more than 1 million residential and small commercial customers. Consert offers a unique integrated AMI, demand response (DR), and home energy management service, and has supplied their "Virtual Peak Plant" system to large and small municipal, cooperative, and investor owned utilities.
Consert uses 3G cellular networked smart meters to connect the utility and customer to an in-home network of up to 256 individual devices. Customers equipped with a Consert home area network can access these devices through a web-portal, mobile device, or in-home-device. These access points can be used to create automated device-level settings or to opt out of individual DR events. For the utility, each connected device represents a flexible load resource that can be measured down to the watt, aggregated with other participating homes, and sold into the day-ahead market. Based upon Consert's calculations, most utilities in ISO markets will realize a net present value (NPV) payoff on the value of DR alone in 3-5 years, while the average target residential customer can expect to save 10-20% on their monthly energy use.
While Consert supports traditional cellular AMI features and communications through white-label agreements, the company's core hybrid AMI/DR "Virtual Peak Plant" offering is targeted towards a narrower audience than AMI. Jeff Ebihara, VP of Sales and Marketing, compares Consert's approach to a scalpel - Consert's service is optimized for selective deployment, focusing upon residential and light commercial (i.e. singlephase) endpoints with relatively heavy load. This analogy also applies to the functionality enabled by Consert's DR system; in contrast to the "sledgehammer" of traditional DR, utilities have the ability to select, group, and control individual devices for curtailment events.
Consert's approach differs from that of both traditional AMI and DR vendors. Unlike more established DR providers such as EnerNOC or Comverge, Consert is building a business around residential and light commercial customers rather than commercial and industrial endpoints. Similarly, while the smart meter gateway provides revenue grade billing data, Consert's service is designed primarily around DR rather than AMI. Consert readily admits that their Virtual Peak Plant system may not be cost-effective for system-wide deployment. For their target audience however, Consert offers a fully integrated, end-to-end system that engages and provides measurable benefits to both the utility and the consumer.
"Energy Disaggregation" through the Meter
Where Consert has moved directly into the home with control devices, Sensus is first turning its gaze towards consumer education and the delivery of itemized billing through the meter.
On April 4th, Sensus announced the formation of a new relationship with Navetas, a UK-based energy management start-up spun out of Oxford in 2008. With this agreement, Sensus has gained an exclusive license to market Navetas' energy management software in the United States residential market, while Navetas has sold a 15% stake in exchange for a £5 million investment. More importantly, as noted by Navetas' CEO, Chris Saunders, the company has gained the backing of a major smart meter vendor - developing "a strategic partnership with good global reach."
Navetas' core "ISE" (Intelligent Sustainable Energy) technology is composed of software algorithms that "learn" the device level consumption of a home. Using a single physical input (e.g. a smart meter), this technology is capable of reading and providing itemized billing for devices with consumption as low as 40W, approximately the consumption of a single CFL. Unlike Consert, Navetas has chosen to first focus on "energy disaggregation" and itemized billing rather than device-level control, though Saunders notes that the Navetas system can integrate with demand side management systems to notify consumers of DR events through traditional pathways (text, SMS, in-home device, etc.). Saunders also differentiates the Navetas solution from other "one-plug" approaches, noting that Navetas offers a true "plug-and-play" solution; Navetas' algorithm does not require device labeling or the injection of "noise" onto the circuit.
Under the new licensing agreement, Sensus will adapt and integrate Navetas technology into the company's next generation of smart meters. These meters should reach the market for testing later in 2012, with full production expected in 2013. Utilities who choose to deploy Sensus' next generation meter will have the option of purchasing Navetas equipped smart meters from the factory, or upgrading their new meters over-the-air. For the customer, Navetas-technology provides insight into device-level consumption habits. This insight should prove beneficial to both customers and utilities. Utilities will have more data for customer education and will benefit from a reduction in customer complaints of overbilling, while the customer will have the information to optimize consumption. For example, device-level data integrates particularly well with pre-payment systems, allowing customers to monitor and manage the energy consumption of individual devices.
First Steps Towards the Smart Consumer?
For much of the last century, metering has been a simpler business. The meter has historically been but one (albeit highly visible) of several pieces of service point equipment where the utility converged with the customer. To the consumer, meters were little more than a mystery of whirling dials, and generally speaking, neither utility nor customer paid particular attention to operations on the other side of the meter.
This paradigm began to shift with AMI. From the earliest deployments in Texas, California, and Canada, AMI has been marketed in North America as a dual purpose system that serves the interest of both utility and customer. In reality however, the majority of AMI deployments have delivered direct operational efficiencies to the utility but only ancillary benefits to the average consumer. While enhancements in utility efficiency trickle down as improved service (despite the protestations of smart meter opponents around the world!), pilot deployments of home energy management devices, portals, and systems have faced difficulties attracting and engaging the average, energy-oblivious utility customer.
Over the last 3-4 years, regulators have increasingly called upon utilities to validate and justify the consumer benefit of smart meter deployment. Sensus' Navetas-equipped next-generation meter and Consert's Virtual Peak Plant system represent early developments in the movement to bring smart metering to the consumer. Along with the increasing availability and viability of AMI-based prepayment, these systems should help to educate the consumer…and will hopefully increase energy awareness in our culture of unconscious consumption.
While Sensus and Consert's systems are currently architected around smart meters however, many vendors continue to pursue non-metering pathways into the home. Consert is developing a non-meter gateway device to provide DR services without AMI, while, at its roots, Navetas is a UK company developing software for the UK "energy hub." What will be next as utilities seek to bring the smart grid to the consumer? Will the path to the consumer proceed through the meter? Will targeted, customer engagement deployments ever be viable for the average consumer?
What do you think? We welcome your comments below.
 Consert notes that, in Texas, ~60% of load during peak hours in large households can be attributed to three devices, the HVAC, water heater, and pool-pump.
 More specifically, in this function, Consert serves as a measurement and verification service provider rather than a DR management solution (enrollment, analytics, trade clearing) vendor.
 Notably, Consert does not market its system as an AMI network and does not include the value of AMI services when estimating NPV for prospective clients.
 Consert's system is best suited for newer homes (10-15 years old) with central HVAC. Electric water heating (vs. gas) also helps to support the business case, while broadband access is helpful for the full realization of consumer benefits (Consert also sees a future opportunity to offer/support broadband delivery through the meter!). The average target customer is a top 20% consumer by kW totals, a moderate and higher income earner, and resides in a larger-than-average house.