What Happened?
A new research report claims that small, local, municipal utilities will drive the installation of “smart-grid” investments over the next five years.
Who Cares?
Municipalities increasingly want to provide energy savings, demand response, and flexible pricing—for electric vehicles, for example—but most cannot justify the costs of smart grid technologies. That has been the case in cities like Palo Alto, which have had to put smart grid plans on the backburner.
The Landscape
But that may be changing. There are approximately 2,000 municipal utilities across the United States, most of which purchase the power that they don’t generate locally. According to reports, those utilities are “desperate” to save money through smart-grid technologies; that dynamic is driving municipal utilities to make smart grid investments, according to a new study by GTM Research.
The Data
According to the study, these municipal utilities are expected to spend up to $9 billion on smart-grid technologies from now until 2017; a whopping 72 percent said smart meters were critical to the utility’s vision. Smart municipalities will capitalize on that spending to accelerate local smart-grid investment.
Advantages
Smart-grid technology and smart metering has several advantages for cities and municipal utilities:
- Savings—Smart meters typically yield lower operating costs, as the devices communicate bi-directionally. That means fewer personnel required in the field, which impacts more than just salaries—it means lower transportation costs, insurance costs, etc. It also helps eliminate errors and fraud.
- Resident Satisfaction—Eliminating downtime is critical when it comes to homeowner and local business satisfaction. Smart-grid and –metering solutions have the capacity to pinpoint leaks or outages before customers report them. That means fewer complaints, and customers satisfied that their city is “on the ball.”
- Conservation—Though not guaranteed, smart-grid and –metering technology often has a positive effect on conservation, as customers can review their usage at any time, and even compare their usage with neighbors.
Early Adopters
Several cities have already made significant smart-grid and smart-meter inroads. Boulder, Colo., for example, is online with Xcel Energy’s SmartGridCity project, and has more than 16,000 smart meters in action. The system enables the municipal utilities to adjust usage during peak demand, and users have already realized energy savings. The Maui, Hawaii, Smart Grid Project has also aggressively deployed smart meters, and Sacramento’s Municipal Utility District has smart-grid technology in 600,000 homes.
Next Steps
The report’s author, Ben Kellison of Greentech Media, has provided Gov1 readers an exclusive list of action items:
- Plan—Start by formulating a plan implementing smart-grid technology. To do that, you need to known local system, your customers, and your system problems; you also need to prioritize how to fix those problems.
- Know What Your Want—Communications networks are the key to smart-grid technologies. As such you need to know when you can—and can not—leverage a technology to tap multiple “value streams.” According to Kellison, value streams really represent the advantages you’re looking to get from your systems. They could include using a single network for multiple electric utility applications; providing services to the electric utility and other city departments; or enabling the telecommunications “triple play": Internet, phone, and cable.
- Get Ahead—Kellison says cities should “be proactive in the public relations fight,” and should be forward-thinking and strategic. For example, don’t claim bills will be lower. That’s because the cost of energy is expected to rise significantly over the next couple of decades. Smart-grid technologies will offset some of this increase through reduced operational expenses, but don’t over-promise.
- In The Clouds—Don’t be afraid to suggest that the utility utilize the cloud or software-as-a-service products; many smart grid vendors are well positioned to deliver these solutions much faster and at a lower capital expenditure.
- Conservation—According to Kellison, Closed-loop Volt-VAR Optimization (VVO) that utilizes conservation voltage reduction (CVR) holds the greatest potential for utility-controlled conservation. “A properly installed system can lower the power consumed on a circuit by 1 percent to percent,” he says, without any customer action.
Kellison can be reached via email if you have any questions about the report.