Use of, and plans to use, electricity net metering are spreading around the country driven by a pressing need to modernize and upgrade the nation’s electricity grid in the face of forecast increases in demand and an equally urgent drive to reduce carbon dioxide and greenhouse gas emissions. Moreover, net metering is a key element of efforts to build a Smart Electrical Grid, which in and of itself may be one of the largest generators of power and cost savings, as well as catalysts for increasing use of renewable energy sources.
More than 35 states currently offer net metering programs. In addition to enabling electricity suppliers to better manage and increase the efficiency of power generation and distribution, net metering is considered to be among the best ways of providing incentives for consumers to invest in renewable energy generation.
Able to turn backwards, net meters enable customers to offset their electricity consumption over a billing period by putting surplus electricity they don’t use or generate themselves back into the grid. In return customers receive retail prices for their electricity surplus. In contrast, programs that entail installation of a second meter to measure electricity that flows back to the provider typically credit customers’ accounts at a below market rate, according to the Dept. of Energy Office of Energy Efficiency and Renewable Energy’s Green Power Network.
Advanced Meter Infrastructure & Home Area Networks
Demand for advanced electricity meters with embedded wireless sensor networks (WSNs) will grow from a few thousand units in 2004 to 1.5 million this year, according to an ON World report based on a survey of nearly 100 utilities.
ON World researchers found that 3/4 of the utilities surveyed are using or planning to use Automated Meter Reading (AMR) within the next 18 months. Nearly half of deployments involve advanced metering infrastructure (AMI) with two-way communications. Some 46% are planning a demand response program with dynamic pricing options.
“While most of the revenues at this time are for smart meters, Home Area Network (HAN) applications and devices that interoperate with these advanced meters have enormous developer potential,” Mareca Hatler, ON World’s Director of Research stated in a media release.
The HAN market may reach 276 million devices in 2012, according to forecasts for two-way AMI enabled electric meters and the average number of HAN devices to be deployed per household, according to ON World’s research.
This is bringing together utilities and wireless sensor network technology developers together in an effort to develop an industry-wide standard that ensures interoperability and backwards compatibility. “Utilities are working together with vendors such as Itron, Cellnet+Hunt, Comverge and Tendril Networks to create a ZigBee AMI profile that will leverage several years of development on the recently completed ZigBee Home Automation Profile. The ZigBee AMI profile is expected to be completed in early 2008,” according to ON World.
Building a Smart Grid
Instituting net metering nationwide is an integral element of plans to re-build and modernize the country’s aging electricity grid. “Each year 131 million electricity customers (nearly every household and business) pay about $247 billion in electric revenues, at an average price of about 7 cents per kilowatt-hour. Demand for electricity is projected to grow 40 percent by 2030, which in turn will likely increase prices,” Jay Birnbaum, senior vice-president and general counsel of the Current Group LLC testified in June before the Senate Committee on Commerce, Science and Transportation’s Subcommittee on Science, Technology and Innovation.
“That is why Smart Grid is crucial – it offers a cost-effective way to increase the amount of electricity available through greater efficiency and network reliability. In other words, a megawatt saved is even better than a megawatt generated because it costs less and because such efficiency-captured electricity is as at least as clean as solar, wind or other renewable energy resources.”
Power outages and “blink of the eye” power quality disruptions cost U.S. businesses $100 billion per year or more, according to the Electric Power Research Institute (EPRI). “Smart Grid can immediately increase the efficiency of businesses nationwide by providing utilities with real-time actionable intelligence about their networks that can be used to prevent such costly disruptions,” Birnbaum maintained.
He noted that 40% of energy consumed in the U.S. is used to produce electricity, the quality and importance of which is being made increasingly apparent in an increasingly integrated global economic system driven by high and rising energy and environmental costs.
Building a Smart Grid can reduce U.S. electricity consumption up to 10% by 2020 and hence lead to a 25% reduction in CO2 emissions, according to Birnbaum. “It should be considered a renewable energy resource in its own right – after all, the cleanest power of all is power you do not have to use due to captured efficiencies…Increased efficiency of existing distribution and consumption equates to making additional power available at lower costs and with less environmental impact. Such efficiencies reduce the need for constructing new generation plants and associated transmission facilities. Smart Grids can provide the communications and monitoring necessary to manage and optimize a portfolio of distributed and renewable energy resources.”