Seeking Energy Efficiency Nirvana: Using Smart Technology and Smart Data To Save Energy

Meeting Date: 19 April 2011

Report

Written by Michael Mainelli

On behalf of the Real Time Club, Geoffrey McMullen, Vice-Chairman, welcomed 65 climate-change-aware members and guests to the National Liberal Club for an evening of practical, can-do ITC. Both speakers agreed on the importance of energy efficiency to reduce emissions and increase energy security. Norman Crowley kicked off with ten minutes from the perspective of a serial entrepreneur, first in e-commerce, then gaming, now green. Norman’s company, Crowley Carbon, helps firms reduce their energy consumption. Norman pointed out that a more effective question than “how are we going to fix the problem?” is “how are we going to fix the problem and make money?”. Norman shared stories of firms wasting 60% of the energy they’re using. He made a telling point about negawatts (energy saving) that when you save energy the savings are consumed locally, i.e. a large energy user typically remains a large energy user even after significant savings.

Will Siddall followed with ten minutes of equally good sound-bites, including “the most efficient mile is the mile never driven”. Will leads IBM’s advanced analytics and optimisation work in the UK utilities industry, encompassing water, electricity and gas. From this perspective, Will laid out three key steps to reducing energy usage – information, incentivisation and automation. Will discussed the need for personal, timely and actionable information. A meter on a wall alone doesn’t do the job. On incentivisation, Will believed firmly in the importance of economics driving behaviour change. Will highlighted some of the current (sic) contradictions, for example high diesel and petrol taxes, but not high electricity taxes, and that utilities have heavy user tariffs that encourage more consumption. Finally, as one might expect from IBM, Will promoted increased automation using smart grids and in home smart technologies, but provided some good examples. One such trial in Washington state reduced average peak demand by up to 15%, but at certain critical points up to 50%, thus removing demand for more production and grid infrastructure, as well as reducing customer bills by 10%.

After a short break, the ever-vigorous Real Time Club interchange began. Some of the highlights included: how far can technology solve the efficiency problems? The response was that all three steps – information, incentivisation and automation, reinforce each other, but they do have long lead times. One area to note was that thermal consumption (heaters, refrigerators, kettles), constituting over 50% of home electricity consumption, is the most addressable to time transfer for load smoothing and balancing;

does the consumption of metering and automation consume its own savings? While recognising that metering and automation does consume significant amounts of power, this question drew an emphatic ‘no’ from both speakers and members of the audience looking at the net savings. Metering and automation have been proven to increase markedly overall energy system performance;

• which is more important, people caring or actual incentives? With a nod to consumers caring, consumers care about cost. A point to note was that consumers are removed from concepts of efficiency or even the source, e.g. renewable energy, of power, but do care about cost;
• if we have the technology, why aren’t people being more efficient? The conversation touched on two points – the price of fossil fuels would drive people towards noticing costs and better regulation would help to provide better structures for markets, e.g. disallowing heavy user tariffs that encourage consumption while encouraging heavy user tariffs that penalise heavy consumption;
• when will light-emitting diodes (LEDs) become the norm? Norman believed that in many cases LEDs already make sense, but extrapolating from past performance improvements in about four years it would be hard to imagine many situations where LEDs wouldn’t be the norm;
• when will electric cars electrify us? The consensus seemed to be that it wasn’t performance or price, but probably range that was the limiting factor. The presumed tipping point was that once electric cars can do 400 miles handily consumers will adopt them readily.

One of the more interesting stories that conveys a spark of the evening was about the US Federal Energy Regulatory Commission (FERC) recently putting negawatts and megawatts on the same economic footing. FERC Chairman, Jon Wellinghoff, decreed (March 2011) that megawatts reduced are to be paid as much money as megawatts generated in US electricity markets. Apparently, Wellinghoff has indicated he aims in future to require paying more for negawatts than megawatts. Similar curtailment agreements in the UK might equally be pepped up. Along the way there were some friendly swipes at the incompetency or idiocy of electricians and their training, but for an evening based around the unelectrifying subject of business and home utilities, it was surprisingly fun.