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US Passes Smart Meter Milestone: 20 Million Units Now Installed
Electricity Currents A survey of trends and insights in electricity restructuring
Calif. Energy Future: Greener, Cleaner, and More Efficient, Too In 2006, California passed the Global Warming Solution Act, also known as Assembly Bill 32 or simply AB 32. To comply with the law, which is to be implemented starting in 2012 if all goes according to the script, the Golden State has to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020 – and further reduce them to 80 percent below 1990 levels by 2050. This is to be accomplished while the state’s population is projected to grow from 37 million to 55 million over the next 40 years and demand for energy is expected to roughly double. Not a trivial feat. The question increasingly being asked is, given the daunting challenges involved, can California actually pull it off – and do it without ruining its economy? A second, equally important, question is whether this would be worth the effort given that California
In Electricity Currents This Month: Calif. Energy Future: Greener, Cleaner, and More Efficient, Too. . . . . . . . . . . . . . . US Passes Smart Meter Milestone: 20 Million Units Now Installed . . . . . . . . . . . Solar Getting Cheaper Than Fossil Fuel, GE Exec Claims . . . . . . . . . . . . . . . . . . . . Time Has Finally Arrived For Time-Variant Pricing – But What Flavor? . . . . . . . . . . .
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Electricity Currents is compiled from the monthly newsletter EEnergy Informer published by Fereidoon P. Sioshansi, President of Menlo Energy Economics, a consultancy based in San Francisco. He can be reached at [email protected].
Continued on page 5
US Passes Smart Meter Milestone: 20 Million Units Now Installed According to records compiled by Chris King, president of eMeter Strategic Consulting, a metered data management company, total U.S. smart meter installations passed the 20 million mark in mid May 2011. Moreover, eMeter predicts that, with the existing plans and announced commitments already in place, the industry is poised to add an additional 50 million smart meters by 2015. A list of the existing and committed projects compiled by eMeter is available at: http://www.emeter.com/ July 2011, Vol. 24, Issue 6
1040-6190/$–see front matter
1
smart-grid-watch/2011/us-20-million-smartmeters-now-installed/ Since there are roughly 150 million electric customers in the U.S., that means that even with the rapid progress to date and projections for additional 50 million smart meter installations by 2015, there would still be roughly 80 million dumb meters around in the US in 2015. The total number of meters globally are estimated around 1.7 billion – and the bulk of those are anything but smart. Current level of global spending on smart meters, estimated by Chris King to reach $46 billion by 2015, would barely scratch the surface of the problem. Of course, in many developing countries, people will be delighted simply to have access to electricity – how it is measured and billed is far from critical. The International Energy Agency (IEA) puts the figure a tad below a billion worldwide, and – surprisingly – does not expect the number of people without access to electricity to diminish anytime soon. Smart meters, of course, are needed before dynamic prices (DP) can be implemented. And dynamic prices are needed if the aim is to encourage customers to shift away from peakhour consumption. Demand response (DR), which broadly refers to programs that offers customers financial incentives to reduce consumption during high-demand periods, also rely on the availability of smart meters.& doi:/10.1016/j.tej.2011.06.011
Solar Getting Cheaper Than Fossil Fuel, GE Exec Claims It takes guts for a company with the size and clout of General Electric (GE) to publicly announce that solar-generated power will soon be cheaper than fossil-fueled generation or power derived from nuclear reactors. The company has to be careful not to offend its clients who rely on conventional generation. 2
1040-6190/$–see front matter
Yet that is more or less what Mark Little, GE’s global research director, said in an interview with Bloomberg on May 26, 2011. He predicted that at the current rate of progress, the crossover would happen within three to five years. ‘‘If we can get solar at 15 cents a kWh or lower, which I’m hopeful that we will do, you’re going to have a lot of people that are going to want to have solar at home,’’ Little said. Average retail electricity rates in the U.S. vary from as low as 6 cents/kWh in Wyoming, Kentucky, Idaho, and a few other states to as high as 15–30 cents in places like New York and Hawaii, making solar-generated electricity already a bargain in some places. More important, however, is that in some high-cost states such as California, many customers are on tiered tariffs – which means they pay different amounts for different blocks of power. Big residential electricity users in California, for example, may face rates in the 30–50 cents/kWh in the fifth tier. Which makes solar-generated power a real bargain at the margin. Now, with the advent of smart meters and introduction of dynamic prices, more customers are likely to face rather steep rates during peak demand hours – which happen to be peak generation hours for solar panels. Throw in a myriad of incentives and subsidies and one realizes that Little is not far off the mark. If anything, he is probably being conservative. Little said solar installations may increase by 50 percent in 2011 alone, worth an estimated $140 billion – a remarkable growth rate. What is driving the growth, of course, is massive investment going into solar PV manufacturing across the globe, with intense competition among the players for technological innovation, lower costs, and market share. GE, for its part, is trying not to be left behind in the rapidly growing renewable sector, even though the company’s traditional base remains making turbines and heavy-duty components for the power sector, not to mention nuclear reactors. Little said GE is planning to introduce Nucleus, a device that will let consumers track their The Electricity Journal
Calif. Energy Future: Greener, Cleaner, and More Efficient, Too In 2006, California passed the Global Warming Solution Act, also known as Assembly Bill 32 or simply AB 32. To comply with the law, which is to be implemented starting in 2012 if all goes according to the script, the Golden State has to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020 – and further reduce them to 80 percent below 1990 levels by 2050. This is to be accomplished while the state’s population is projected to grow from 37 million to 55 million over the next 40 years and demand for energy is expected to roughly double. Not a trivial feat. The question increasingly being asked is, given the daunting challenges involved, can California actually pull it off – and do it without ruining its economy? A second, equally important, question is whether this would be worth the effort given that California
In Electricity Currents This Month: Calif. Energy Future: Greener, Cleaner, and More Efficient, Too. . . . . . . . . . . . . . . US Passes Smart Meter Milestone: 20 Million Units Now Installed . . . . . . . . . . . Solar Getting Cheaper Than Fossil Fuel, GE Exec Claims . . . . . . . . . . . . . . . . . . . . Time Has Finally Arrived For Time-Variant Pricing – But What Flavor? . . . . . . . . . . .
. .1 . .1 . .2 . .3
Electricity Currents is compiled from the monthly newsletter EEnergy Informer published by Fereidoon P. Sioshansi, President of Menlo Energy Economics, a consultancy based in San Francisco. He can be reached at [email protected].
Continued on page 5
US Passes Smart Meter Milestone: 20 Million Units Now Installed According to records compiled by Chris King, president of eMeter Strategic Consulting, a metered data management company, total U.S. smart meter installations passed the 20 million mark in mid May 2011. Moreover, eMeter predicts that, with the existing plans and announced commitments already in place, the industry is poised to add an additional 50 million smart meters by 2015. A list of the existing and committed projects compiled by eMeter is available at: http://www.emeter.com/ July 2011, Vol. 24, Issue 6
1040-6190/$–see front matter
1
smart-grid-watch/2011/us-20-million-smartmeters-now-installed/ Since there are roughly 150 million electric customers in the U.S., that means that even with the rapid progress to date and projections for additional 50 million smart meter installations by 2015, there would still be roughly 80 million dumb meters around in the US in 2015. The total number of meters globally are estimated around 1.7 billion – and the bulk of those are anything but smart. Current level of global spending on smart meters, estimated by Chris King to reach $46 billion by 2015, would barely scratch the surface of the problem. Of course, in many developing countries, people will be delighted simply to have access to electricity – how it is measured and billed is far from critical. The International Energy Agency (IEA) puts the figure a tad below a billion worldwide, and – surprisingly – does not expect the number of people without access to electricity to diminish anytime soon. Smart meters, of course, are needed before dynamic prices (DP) can be implemented. And dynamic prices are needed if the aim is to encourage customers to shift away from peakhour consumption. Demand response (DR), which broadly refers to programs that offers customers financial incentives to reduce consumption during high-demand periods, also rely on the availability of smart meters.& doi:/10.1016/j.tej.2011.06.011
Solar Getting Cheaper Than Fossil Fuel, GE Exec Claims It takes guts for a company with the size and clout of General Electric (GE) to publicly announce that solar-generated power will soon be cheaper than fossil-fueled generation or power derived from nuclear reactors. The company has to be careful not to offend its clients who rely on conventional generation. 2
1040-6190/$–see front matter
Yet that is more or less what Mark Little, GE’s global research director, said in an interview with Bloomberg on May 26, 2011. He predicted that at the current rate of progress, the crossover would happen within three to five years. ‘‘If we can get solar at 15 cents a kWh or lower, which I’m hopeful that we will do, you’re going to have a lot of people that are going to want to have solar at home,’’ Little said. Average retail electricity rates in the U.S. vary from as low as 6 cents/kWh in Wyoming, Kentucky, Idaho, and a few other states to as high as 15–30 cents in places like New York and Hawaii, making solar-generated electricity already a bargain in some places. More important, however, is that in some high-cost states such as California, many customers are on tiered tariffs – which means they pay different amounts for different blocks of power. Big residential electricity users in California, for example, may face rates in the 30–50 cents/kWh in the fifth tier. Which makes solar-generated power a real bargain at the margin. Now, with the advent of smart meters and introduction of dynamic prices, more customers are likely to face rather steep rates during peak demand hours – which happen to be peak generation hours for solar panels. Throw in a myriad of incentives and subsidies and one realizes that Little is not far off the mark. If anything, he is probably being conservative. Little said solar installations may increase by 50 percent in 2011 alone, worth an estimated $140 billion – a remarkable growth rate. What is driving the growth, of course, is massive investment going into solar PV manufacturing across the globe, with intense competition among the players for technological innovation, lower costs, and market share. GE, for its part, is trying not to be left behind in the rapidly growing renewable sector, even though the company’s traditional base remains making turbines and heavy-duty components for the power sector, not to mention nuclear reactors. Little said GE is planning to introduce Nucleus, a device that will let consumers track their The Electricity Journal