What did we learn from European Utility Week 2017 in Amsterdam It was a really big event Here are some statistics about it: 12,000 + attendees 100 + countries 500 + utilities and grid operators 600 + exhibitors 550 speakers The future is here There is so much going on in the energy field today and all the companies who participated in the exhibition proved it. MClimate’s booth became very popular and we were excited to showcase our new products: Vicki and Bobbie. We were amazed to meet people from all around the world: USA, Portugal, Spain, France, Sweden, Australia, New Zealand, Côte d'Ivoire, Croatia, United Arab Emirates, etc. We talked to utility experts from E.ON, Enel, Regaz, Enedis, Duferco Energia, EDP, Igdas, SEWA (Sharjah Electricity & Water Authority), EDF, etc and found that most of the utilities have already started the energy revolution with their businesses. We met energy trading companies that have implemented smart home devices in their customers’ offers. We discussed demand response opportunities for residential with companies who have already started pilot projects to balance the grid with interactive devices. All of the experts we talked to proved that customers are the main focus of energy companies today. We learned more about different customer engagement program for boosting energy efficiency. Energy business is not boring If you think that energy business is done by middle-aged old-fashioned engineers you are wrong. During the exhibition, we met many young people (not only males but a significant number of females which proves that energy business is not a male territory) representatives of utility companies who were very knowledgeable and experienced. We learned about many ongoing projects in the energy field that apply innovative technologies like blockchain. Challenges for energy companies During the exhibition, it was proved that the “smart home concept” is not anything revolutionary for utilities. Not anymore. It is an ongoing topic for energy companies. The market of smart home devices is already competitive and we could see this from the other exhibiting companies: Nest, Tiko, Hive, Develco, Fifthplay, etc. Energy companies have already assessed all the benefits they can get through smart home devices and they are deploying smart home technologies in their businesses. However, all these devices that are becoming part of people’s lives raise new questions. What to do with the collected behavioral data? How energy companies can benefit from household’s data for consumption, savings, what temperature people like or when they are at home. Big data concerning customers might be a gold mine for energy companies and they need to figure out how to take most of it. Big thanks to Andy Bradley who featured MClimate in one of the industry's top blogs Delta EE: "We were fascinated to meet this Bulgarian start-up, MClimate, who seems to have a bunch of talented young people!" Read his article "EUW 2017 - The hot topics" here!

Balancing the grid - a challenge for future electricity distribution.

An extreme hot wave hit Europe, Southwest USA and parts of Asia this summer. The records are a scorching reminder that we are really experiencing climate change nowadays. Doctors warn people about negative effects on health caused by hot weather. In the meanwhile energy experts alarm that the security of national grid is highly dependent on the changing weather. Climate change is projected to have severe impacts on the frequency and intensity of the peak electricity demand across the United States.

The U.S. Energy Information Administration (EIA) estimated that in 2016, space cooling (air conditioning) was 18% of the annual household electricity use, followed by water heating - 9%. Typically, monthly home electricity consumption peaks in July and August when temperatures and cooling demand are at its highest. These demand peaks put significant stress on the electricity grid and increase the chance of blackouts. Additionally, a new record was set in March 2017 where wind and solar power accounted for 10% of the total electricity generation in the US (wind - 8%, solar - 2%, EIA’s Electric Power Monthly).

Smart solutions

In fact, there are two types of peaks: supply peak caused by renewable generation and demand peak caused by residential consumption. Usually, these peaks do not coincide and it is a real technological challenge for grid operators to find the balance. A possible solution is an investment in additional reserve generation capacities but this will raise electricity prices for consumers and could also cause additional negative climate effects. However, smart grid technologies could give a better solution. Advances in batteries or the use of electric vehicles or water heaters for storage would reduce fluctuations. As such, although average generation would not be directly impacted, peaks would diminish.

According to the EIA’s definition, Demand response is the opportunity for electricity consumers to intentionally shift or reduce their load either in response to price signals or in exchange for an incentive. New smart appliances and technologies are now empowering smaller consumers (or energy service providers on behalf of consumers) to manage their own electricity demand. In 2015 the U.S. House of Representatives passed the changes in Energy Policy and Conservation Act (EPCA) in order to provide additional energy conservation standards applicable to grid-enabled water heaters for use as part of an electric thermal storage or demand response program.

Demand response strategies

Water heaters are considered to be behind-the-meter “flexible load”. The authors of the report “The Hidden Battery Opportunities in Electric Water Heating” describe three possible strategies:

• Peak Shave - the water heater is managed from a distance only for a limited number of days of the year when the system peak is likely to occur.
• Thermal Storage - on a daily basis the water heater heats at night and then is curtailed during highest priced hours of the day. This strategy is used to capture energy value through energy price arbitrage.
• Fast Response - the water heater offers frequency regulation into the wholesale ancillary services market while heating water during off-peak hours, on a daily basis. The water heater responds to a signal from the system operator and in a matter of seconds can increase or decrease load depending on the need.

Grid operators can apply each of the three demand response strategies with the help of the smart water heater controller Bobbie, the device which turns any water heater into grid interactive water heater (GIWH). Bobbie has an open API and shows how much energy could be stored in the water heater. It allows ON / OFF functionality from distance.

Although demand response may still sound theoretical and regulatory proceedings have just been applied there are quite many pilot projects that prove the efficiency and economic benefits of demand response strategies.

See real use cases for demand response projects with water heaters here:

PJM, Kootenai Electric Cooperative, Central Electric Coopoerative , Great River Energy, Hawaiian Electric’s Grid-Interactive Water Heater (GIWH) initiative

References:

Auffhammer, Maximilian, Patrick Baylis, and Catherine Hausman. 2017. “Climate change is projected to have severe impacts on the frequency and intensity of peak electricity demand across the United States”. Proceedings of the National Academies of Sciences. 114 (8) 1886-1891. http://www.pnas.org/content/114/8/1886.full.pdf

EIA’s Residential Energy Consumption Survey (RECS) https://www.eia.gov/consumption/residential/

EIA’s Electric Power Monthly, June 2017 https://www.eia.gov/electricity/monthly/

Ryan Hledik, Judy Chang, Roger Lueken, 2016, “The Hidden Battery Opportunities in Electric Water Heating” https://www.eenews.net/assets/2016/02/10/document_gw_03.pdf