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Smart Grid Technology Interval data: the key to unlocking $130 billion per year in smart grid savings

By: Chris King |

Why the heck does the power industry need hourly or quarter-hourly interval usage data for every customer? To achieve maximum benefits from smart meter investments:

Information-driven energy savings. Interval data can yield useful information that helps customers grasp key concepts — such as how behavior affects energy use, “vampire” loads, roughly how much power is consumed by each major appliance (or piece of commercial equipment), and how much you can save with more efficient devices. Research shows average energy savings of 5-10%.

Time-based pricing. Interval data supports important customer options such as time-of-use and critical peak prices, peak time rebates, and other demand response programs. In one survey, 73% of customers requested these options. Such programs reduce peak demand by 20%, which means utilities need fewer power plants — another huge savings.

Wholesale market savings. In most wholesale electric markets, prices change every hour or more frequently. Without interval data, retailers pay for energy based on hourly estimates of customer usage. Therefore, even if a customer lowers peak use, the retailer still must pay the higher energy cost; the estimate doesn’t change. With real interval data, retailers see real savings which can be passed on to consumers.

More reliable and efficient grids. Interval data lets utilities calculate actual loads on equipment such as transformers. This can prevent failures (outages) from overloads. It also helps utilities invest more efficiently by installing accurately sized transformers, and by focusing investments on areas with the worst overloading problems. Grid investment savings can total tens of millions of dollars for a large utility.

Increasing renewables. Wind and solar are great energy sources, but they occasionally wreak havoc on the grid because they sometimes generate too much or too little energy. So far, the only solution is to cut them off and lose what otherwise would have been free energy.  A better solution is to use time-based pricing (supported by interval data), as well as demand response, to offset some of these fluctuations. This saves money and improves reliability — including more voltage stability. Right now, Hawaii is demonstrating this in a large-scale pilot.

McKinsey says smart grid savings could total $130 billion per year, roughly one-third of our nation’s annual electric bill! One of their key assumptions?  Interval data for every customer.