Geoff Flood
by Geoff Flood
This op-ed was originally printed in the Telegraph-Journal, Daily Gleaner, and Times & Transcript on January 30, 2020.
The smart meter project proposal put forward by NB Power earlier this month addresses an essential component of grid modernization. The hearings have just completed and the majority of the intervenors have indicated their support for the idea.
The business plan shows a positive return on investment, using a narrow and extremely conservative calculation of the known benefits. But these returns are dwarfed by the unknown and unquantified benefits that will inevitably arise as a new platform for innovation and creativity becomes active in our province. This is a game-changing opportunity for New Brunswick and to miss it would be regrettable.
This is not our grandparents’ power company. While the mandate to keep the lights on remains, the power and utilities sector is becoming increasingly attractive to new players hoping to capitalize on business prospects that have arisen because of our demands to produce greener, cleaner energy at reduced cost.
Smart meters are an entry-level part of a future platform for growth, conservation, grid management and innovation.
Aging infrastructure is failing at utilities across the planet and staying on top of increasing grid complexity is producing severe challenges for grid operators who must act quickly and effectively to resolve issues.
Continuing what they have been doing for the last century is likely not going to work.
Because time-of-use is such a confounding factor, and because you can’t economically store power at scale today, local alternatives to storage and generation will continue to grow at a rapid pace. Utilities will be faced with increased grid maintenance expense (as local power generation and microgrids develop) and declining revenue.
Solving this “wicked problem” provides great scope for the for creators and the innovators to do their thing.
Smart meters are two-way “internet of things” devices that support demand response, voltage management, outage management, accelerated restoration and overall operational efficiency.
But they also supply data to the consumer and the producer, and allow for the discovery and implementation of methods that increase efficiency, reducing consumption and cost. Insights derived from data analysis will promote continuous improvement at every stage of the energy supply chain.
But beyond that, smart meters are also capable of acting as the gateway to access and control all kinds of digitally enabled devices in the home. Some leading thinkers have posited that utilities should become the de facto operator of the entire home gateway and offer an improved menu of services and security for consumers.
There is extreme risk in denying the inevitable. We are behind much of the western world already in the implementation of smart meters. If we don’t get up to date, we will have to deal with reduced system reliability and predictability, and we will not have the information we need to build more efficiencies into the system.
We will not see the end of the need for centralized management of energy supply and distribution. But we will see an end to the monopolization of power generation. In the coming years, utilities will evolve to focus on distribution and resiliency. The power company will evolve to an “energy services utility” focused on the efficient balancing of the energy supply and demand.
Assuming regulatory approval of the smart meters project, we can try some fresh thinking:
What if government mandated that the utility put the infrastructure in place for time-of-use pricing and dictated a timeline for its adoption?
What if the government mandated that the power company accelerate the connection of alternate sustainable energy suppliers?
What if NB Power became NB Grid and its purpose was shifted to grid management from power generation?
What if the smart grid network became the gateway to the digital assets operating in the home, with our privacy and security needs addressed with a high degree of integrity?
The smart meter project is a foundational element, allowing NB Power to have a real-time awareness of the state of every connected device on its network. It will be able to act proactively to address risks and opportunities and to optimize the grid for resilience and efficiency.
As a platform for innovation, local companies will be able to build products and solutions that are in demand globally. You need to look no further than cybersecurity as an area in demand where we excel already.
In case some of the fresh thinking I have outlined seems far-fetched consider this: Denmark is home to the world’s most sustainable company. Not much bigger than NB Power, Orsted is a global leader in onshore and offshore wind development and it is a leader in renewable hydrogen and biomass energy production.
Denmark is targeting to be CO2 neutral by 2050 and Orsted has increased its green share of power generation from 17 per cent in 2006 to 80 per cent now. It is on track to reach 99 per cent in 2025. This is essentially zero emissions.
This has been accomplished in part with an aggressive program – mandated by the Danish parliament – for 100 per cent smart meter implementation by 2020.
To date, the grid company has installed more than 1 million meters in the last two years with 86 per cent customer satisfaction. This will deliver dynamic pricing and choice of electric supplier to Danish consumers.
Here in New Brunswick, NB Power is acting with integrity to do the right things for our energy future. But they need the support of political leadership and their customers to succeed.
Geoff Flood is founder of T4G, a strategic consulting firm. He was an intervenor in the recent Energy and Utilities Board hearings into smart meters.