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Of their innate nature, electronic power meters are capable of compiling and transmitting data at any time. However, this functionality is not always exploited. Automated Meter Reading (AMR) is often implemented only to replace pedestrian meter readers by wireless data inquiry equipment that may be installed in a drive-by vehicle. The frequency of power readings is not increased. Without enhanced billing information, no additional motivation towards resource conservation results from this technological innovation.
By contrast, an intercommunicative Advanced Metering Infrastructure (AMI) is employed with the specific intention of sending real-time feedback information to each consumer in order to evoke responsive adjustments of demand. Interactive efficiency improvements are thereby realized from three perspectives of energy usage:
1. Feedback of metered demand. Numerical readouts of current and cumulative power usage are provided at the meter on an integrated display panel. Customer awareness of changing demand conditions can be significantly enhanced by an additional display device located prominently within the living quarters to provide graphical indications of consumption and visual alerts triggered whenever preset energy or monetary budgets have been exceeded. This local feedback of information supports usage decisions and motivates efficiency practices in order to reduce ongoing demand. Utility billing charges act as additional feedback information to refine the budgeting criteria selected by the customer.
2. Feedback of aggregate grid load. The aggregate metered demand of all customers constitutes the grid load. AMI intercommunication allows the demand to be monitored continuously by the utility company. Dynamic real-time prices can then be relayed to individual meter displays to prompt the alteration of demand by customers whenever warranted by grid supply conditions.3. Feedback of environmental costs. Electricity billing rates already reflect weather-related hydroelectric variations, power plant cooling water limitations, and ecological taxes. The effects of CO2 emissions trading and other dynamic environmental costs may be directly calculated by an AMI meter. The respective pricing coefficients will lie higher for coal or lignite compared with gas power generation and diminish significantly for renewable energies. If the correlation of energy charges with persistent ecological burdens is made apparent on the meter display, an incentive will prevail to purchase electricity meeting higher environmental standards.
The overlying objective of real-time data feedback is to enhance the awareness of each utility customer to economically achievable resource savings based on personal demand, the grid load confronting the utility company, and the environmental costs inherent to generating electrical power. Usage decisions may be motivated by any combination of these factors. The customer thereby becomes an interactive component of the power generation and supply infrastructure. Without this capability, consumer judgment will be impaired by billing procedures that generalize the effects of varying grid capacities and environmental effects. Imprecise responses will inevitably misdirect a portion of available energy resources away from cost-effective usage.
Opening the AMI Market on the Path to Kyoto Fulfillment Despite binding obligations under the Kyoto Protocol, demand-side energy management in Europe is concentrated largely on industrial consumers. Most households and small businesses receive a power bill only once a year. This exclusion of the private sector from real-time interaction is due to:
1. Business models and regulatory practices persisting from former closed energy markets,
2. The low power requirements of European households having no electrical climate control systems or water heaters,
3. High grid reliability with few power interruptions of any significant duration,
4. Concern over possible security deficits of metering communications, and
5. Inflexibility of emissions trading within the existing power delivery infrastructure.
However, the difficulties of reducing greenhouse gas emissions with technologies not developed for that purpose adequately justify the adoption of advanced metering. Interactive demand response techniques would contribute to Kyoto compliance in two essential ways:
1. The current reliance on CO2-intensive power plants would be reduced, just as the need for certain generating capacities in the United States has been avoided.
2. The ability to align certain loads with available generation would allow greater amounts of CO2-free wind and solar power to be used despite intermittent availability.
In the European Union, a suitable legal framework already exists for AMI implementation. Article 13 of Directive 2006/32/EC on energy end-use efficiency and energy services prescribes standards of “metering and informative billing of energy consumption” by which final customers are to be provided with “competitively priced individual meters that accurately reflect the final customer's actual energy consumption and that provide information on actual time of use”. Billing is to be performed “frequently enough to enable customers to regulate their own energy consumption”. In addition, “comparisons of the final customer's current energy consumption with consumption for the same period in the previous year” are specified, “preferably in graphic form”, as well as “with an average normalised or benchmarked user of energy in the same user category”.
AMI Cost Defrayment through Multiple Functionality
Despite the energy efficiency improvements that result from advanced metering in combination with progressive billing practices, the EU Directive requires that implementation must be “financially reasonable”. The low electricity consumption of many European households provides only modest perspectives for conservation. However, the costs of AMI deployment can be met by extra-revenue subscriber services using the same communications infrastructure.
This perspective may be obscured by the assumption of voluminous and costly data traffic for real-time power metering. Typically, however, only the information required to improve energy efficiency must be transmitted. Repetitive data feedback becomes superfluous if electrical power demand or CO2 emissions remain within tolerance limits.
The utility customer must be informed immediately of excess consumption, which might be due to the inattentive operation of electrical appliances, but also possibly be caused by hazardous equipment defects. For this purpose, an AMI power meter should be equipped with a multiple alarm function capable of both on-premise alerting using visual or acoustical signaling devices as well as remote messaging via email, SMS, and telephone.
Once this alarm capability is available, it can be used for additional emergency functions such as fire detection, burglary or intrusion alarms, central locking systems, emergency medical signaling, and public disaster messaging. Water and heating energy usage may likewise be metered, both for tracking normal usage and to guard against water pipe breakage in unoccupied buildings due to winter freezing. The control of smart appliances can be realized within the meshed communications network used to implement these functions.
Cost benefits to the utility company will result from service outage/restoration reporting, remote service connect and disconnect, theft of power and water reporting, over voltage and under voltage alerts, power factor monitoring, emergency disconnect, and automated reporting to field service personnel.
The meter may include a “smart card” or memory card reader to allow prepayment of utility services. The card could be loaded with energy credits at a point-of-sale (POS) service terminal. Because of intercommunication with the utility company and the Internet, however, the entire accounting procedure might also be performed at the meter itself using a credit card. The prepayment capability would contribute to reducing the final cost of metering due to the elimination of late or defaulted payments. In the United Kingdom, a resulting decline in the disconnection of electricity customers from nearly 13,000 in 1992/3, to 1,084 in 1994/5 has been reported.(17)
The interconnection of in-home devices can be realized using miniature radio frequency transceivers complying with ZigBee or comparable wireless meshed network standards. Appreciable cost benefits will be realized in comparison with discrete systems, thereby dissipating the financial burdens of AMI over the additional services realized. The power meter becomes a universal network gateway with communications interface.
Demand-Side CO2 Reduction
The preamble of EU Directive 2006/32/EC emphasizes that improved energy end-use efficiency will contribute to the “reduction of primary energy consumption, to the mitigation of CO2 and other greenhouse gas emissions and thereby to the prevention of dangerous climate change”. These objectives focus mutually on the reduction of fossil fuel use and inherent carbon dioxide emissions in satisfying energy requirements.
The usage decisions supported by an advanced power meter can therefore be directed toward eliminating either fuels or emissions containing carbon. While efficiency strategies usually focus on energy savings, CO2 reduction may offer greater environmental benefits when designated as the lead parameter. Supplier changes from low-carbon to high-carbon electricity become less likely if a budget limit has been previously set on emissions rather than on final energy.
Private CO2 Allowance Purchases
An advanced power meter equipped for the prepayment of utility services could be used for carbon emissions accounting, with CO2 allowances bought and sold via the meter card terminal.
According to Article 12 of Directive 2003/87/EC on emissions trading, EU allowances (EUA) can be transferred between any persons within the European Community. While trading registration fees usually discourage private individuals from participation, registered agencies may deal in EUA purchasing and sales to third parties. Article 19 states that any person may hold allowances.
The price of allowances on the European Energy Exchange (www.eex.de) has recently fallen to below 2 euros/ton. At this level, emissions trading presents no significant obstacle to the use of high-carbon fuels. A fundament necessity of reducing allowance availability is therefore indicated.
At present, two institutions in Europe offer CO2 allowances for sale with the specific intention of removing them from the market.
1. The Compensators (www.thecompensators.org) is an association in Potsdam, Germany, specifically established to delete EU allowances from the Emissions Trading Scheme. The allowances are sold with the understanding that they will be retired from trading by the purchaser.
2. Svenska Naturskyddsföreningen (SNF), the largest environmental organization in Sweden, offers emissions certificates on its website (skarv.snf.se/snf/co2/index.asp) for 350 kroner (about 39 euros, or 50 dollars) per ton. By the end of 2006, over 6000 people had purchased allowances to withdraw them from trading. The relatively high certificate cost reflects the unfulfilled expectation of market prices consistent with environmental requirements.
Compared with the total yearly CO2 emissions assigned to Germany (453.1 million tons) and to Sweden (22.8) under the Emissions Trading Scheme, the allowances retired by these programs may exert only minimal effects on trading prices.
By contrast, the ability to withdraw CO2 allocations from circulation at each power meter could exert a continuous, potentially massive influence on the climate-related pricing of electricity. The commercial risks inherent to planning and operating fossil fuel power plants would increase accordingly. Investments in renewable energies would conversely become more secure, reducing the need for public subsidies or special feed-in tariffs to promote their use.
Tradable Quotas for Energy and Emissions
Since emissions trading in the European Union is restricted to the industrial users of energy, the CO2 reductions it is capable of achieving may possibly be negated by rising emissions in other sectors of the economy. To overcome this disparity, the universal allocation of Tradable Energy Quotas (TEQs) is currently under discussion in the United Kingdom. Originally proposed by the London-based policy analyst Dr. David Fleming in 1996, a similar system of Domestic Trading Quotas (DTQs) has been more recently investigated at the University of Manchester with funding from the Tyndall Centre for Climate Change Research.(18)
DTQs (or TEQs) are intended to reduce greenhouse gas emissions from energy usage by requiring anyone purchasing fuel and electricity to surrender emissions rights along with payment. The rights would be distributed free to all adult individuals on an equitable basis, while obliging organizations to purchase the emissions they required on a national carbon market. Individuals who required fewer rights than allocated could sell their surplus rights against added income. Individuals requiring additional rights would purchase them.
The British Government has initiated a pilot program to test the viability of the proposal.(19) Smart bank cards (“swipe cards”) can be employed for storing personal carbon usage, while advanced power meters may be used to calculate the carbon burden of household energy consumption in the course of regular billing routines for electricity and heating fuel.
In the preamble of his latest treatment Energy and the Common Purpose,(20) Dr. Fleming categorizes the objectives of TEQs as:
- Climate change: to reduce the carbon dioxide released into the
air when oil, gas and coal are used.
- Energy supply: to maintain a fair distribution of oil, gas and electric power during shortages.
The designation of emissions as the lead parameter of energy usage coincides with the growing uneasiness of many Europeans over detectable, enduring changes in meteorological and biological phenomena. The United Kingdom is commensurately pursuing the establishment a transatlantic market for carbon dioxide emissions and has already signed a climate pact with the State of California toward this end.(21)
CO2 reductions would provide additional impetus to reducing British dependency on fossil fuels from the North Sea, where declining reserves no longer allow the energy autonomy of earlier years to be maintained. The ensuing restrictions on economic growth are reminiscent of the submarine blockades experienced in two world wars, which evoked collective action in accommodating to material shortages.
Successive reductions in resource deployment are foreseen in Dr. Fleming’s proposal using a 20-year “staircase” budget, devised to promote efficiency in pre-established descending steps. The climate researcher Mark Lynas has termed such measured strategies “rationing the future”. Just as wartime mobilisation in 1940 “ranked above health, education, crime and all the other day-to-day concerns of government”, the defeat of global warming “must be our priority today, or we will lose this war, and with it our very existence as a civilisation.”(22)
Advanced metering permits the consumer to contribute routinely but effectively to climate protection strategies. Passive acknowledgement of global warming is being superseded by viable technological prospects for confronting it.
Footnotes:
17. Mark Scanlan, Walter Neu, Study on the re-examination of the scope of universal service in the telecommunications sector of the European Union, in the context of the 1999 Review (Bad Honnef: Wissenschaftliches Institut für Kommunikationsdienste GmbH, 2000), p. 27.
18. Richard Starkey, Kevin Anderson, Domestic Tradable Quotas: A policy instrument for reducing greenhouse gas emissions from energy use, Tyndall Centre Technical Report No. 39 (Norwich: Tyndall Centre for Climate Change Research, December 2005), p. 1.
19. David Adam and David Batty, Miliband unveils carbon swipe-card plan (London: Guardian Unlimited, July 19, 2006); Charles Clover, Labour plans carbon cap on household energy use (Daily Telegraph, July 20, 2006).
20. Richard Fleming, Energy and the Common Purpose. Descending the Energy Staircase with Tradable Energy Quotas (TEQs) (London: The Lean Economy Connection, 2006).
21. Patrick Wintour, Blair signs climate pact with Schwarzenegger (The Guardian, August 1, 2006).
22. Mark Lynas, Why we must ration the future (London: New Statesman, October 23, 2006).
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