Archive for the ‘metering’ Category

50 billion machines worldwide that can be connected together right now!

Thursday, May 28th, 2009

From the home, to the car, to your health, consumer applications of machine-to-machine technology are growing, and they’re slowly, but surely, changing the way we live.

There are more than 50 billion machines worldwide that can be connected using M2M (machine-to-machine) communications. From robots in manufacturing plants to trucks transporting fresh produce to refrigerators in consumer kitchens, billions of machines have data that’s just waiting to be tapped.

With such large market potential, the number of ways people and companies are using M2M today and the number of ways they will likely use M2M in the future is vast. Yet, in the current marketplace, much of the dialogue on how M2M can be applied focuses on commercial applications: how fleet managers use telematics solutions for fuel efficiency, how big-box retailers use RFID (radio frequency identification) to manage inventory levels, and how manufacturers can create new revenue streams with smart services, among others.

But of the billions of machines in the world today, some undoubtedly belong to the consumer, not the enterprise, leaving many asking: Where does the everyday Joe Smith of the world fit into the (M2M) system integration equation?

The answer to that question is tied to how M2M is impacting everyday life: It is in our home alarms it’s in our cars, and it’s even being used to monitor our vital signs.

Machine-to-machine technology is at the forefront of a “silent revolution,” a subtle, but influential transformation in which people, devices, and systems are becoming more connected.

And nowhere is this revolution happening more “silently” than among everyday consumers. It’s not so much that the technology isn’t available (because it is), or that it doesn’t work (because it does). The reason this revolution is happening “silently” is most people don’t even know it’s happening and sometimes don’t even know it’s there.

Unlike many of today’s commercial markets, the conversations with consumers about M2M products and services rarely broach the technological ins and outs of the solution. In fact, it’s probably unusual if consumers even know they are using M2M. Simply put, consumers don’t want to know how the technology works they simply want to know what it can do and that the technology will deliver on its promise.

And as such, system integration has unassumingly manipulated its way into consumers’ homes, cars, and even medical devices, taking advantage of the progress made in analogous areas in the commercial market.

“Consumer applications are a maturation of other solutions that have been put in place previously for the enterprise space. (The solutions) have proven that the technology does work,” says Dean Fledderjohn, general manager, Kyocera Wireless Corp., www.kyocera-wireless.com/m2m-business, San Diego, Calif.

IN THE HOME
When it comes to consumer applications of machine-to-machine technology, one of the areas technology providers are successfully penetrating is the home. M2M is making its mark in home-centric applications such as automated home technology systems and consumer energy-management solutions, but according to Peter Fowler, president, Cinterion Wireless Modules North America, www.cinterion.com, Issaquah, Wash., alarms have become the gateway into the North American home for M2M.

He believes this technology brings an ease-of-use factor to home security. With cellular M2M becoming more widely adopted for many of today’s new residential security alarms, installations are much easier to do.

“Rather than having to go in the old way and cut a hole in the wall and fish out a telephone line that would make an emergency call, now (installers) can simply activate a SIM (subscriber identity module) and have the customer live within a few hours of them agreeing that they want their home monitored,” explains Fowler.

An added bonus of using cellular is extra reliability. Since the alarm is not connected to a wired phone line, burglars cannot disable the alarm by simply cutting the telephone connection.

In addition, M2M has done more than improve on existing security technologies it has also helped bring security alarms to a new level, giving consumers unprecedented control of their security settings.

“What consumers want is the ability to be notified, to be proactively engaged, and to change the setting on their security systems,” explains Brent Barrs, vice president North American sales, Enfora Inc., www.enfora.com, Richardson, Texas. “They desire to (have the ability) to log in and check the status of the various sensors associated with the system.”

According to Barrs, the days are gone when consumers settle for notifications from a call center. “They don’t want to wait to receive that phone call from the call center alarming them that (an alarm went off) at the house. They like the ability to also receive realtime SMS (short-message service) notifications and email notifications, and consumers are very savvy (since) they have the portable devices that allow them to be comfortable with checking and changing these systems.”

One company providing this level of control to consumers is Alarm.com, www.alarm.com, Tysons Center, Va. Using communication modules from Enfora and sensors and security panels from GE Security Inc., www.gesecurity.com, Bradenton, Fla., Alarm.com offers a wide array of remote monitoring and control capabilities that extend its consumer security offerings into what could more accurately be described as home awareness systems in which security is just one facet of the solution.

“(In the past), most people had residential security systems that were useful only when the systems were turned on, in an armed state,” explains Mary Knebel, vice president of marketing, Alarm.com. Because most people don’t arm their security systems on a daily basis, Knebel adds, the system only delivers value once or twice a month when the homeowner arms the system.

Alarm.com’s solutions combine traditional security alarm capabilities with remote monitoring and control capabilities. Sensors installed throughout a home allow a number of different events, including the opening and closing of doors and windows and whether or not children arrive home from school on time, to be monitored. Homeowners can also use the system to remotely control their homes through a Web interface, performing tasks such as adjusting the temperature of their HVAC (heating, ventilating, and air-conditioning) systems.

“Alarm.com enables the consumer to know what is (occurring) on the property even if the security alarm is in a disarmed state, giving value on a daily basis versus just once or twice a month,” explains Knebel.

Interest in these types of systems is gaining momentum. According to Knebel, when the company entered the market at the end of 2003, Alarm.com worked with only a handful of dealers. Now, she says Alarm.com has a network of more than 900 dealers.

Alarm.com’s solutions are an extension of what many classify as automated home technology systems, an area previously relegated to only the very wealthy.

“Compared to five years ago, (automated home technology) has grown quite dramatically,” says Bob Gohn, vice president of marketing, Ember Corp., www.ember.com, Boston, Mass. “The home automation systems that were traditionally reserved for the rich and famous … have really come down in price and have gotten more popular,” he adds.

Gohn points out this trend doesn’t mean that each and every home will have a home automation system, but he does see home automation moving downstream from the top 0.1% of homes to a wider base.

Analysts echo Gohn’s observations. According to a new report from ABI Research, www.abiresearch.com, Oyster Bay, N.Y., shipments of automated home technology systems are expected to increase to four million by 2013, up from the 237,000 shipped in 2007.

POWER MANAGEMENT
While security systems are the gateway to North American homes, that’s not the case in Europe and other parts of the world. “(Home security) alarms is a growing business in Europe, but it’s more focused on businesses,” says Fowler. “Alarms that are being developed by U.S. companies like Honeywell (are) being sold in Dubai and Europe, but the focus in those markets tends to be on commercial buildings more so than homes.”

So, how is M2M entering homes abroad? Through intelligent metering, Fowler says.

With government regulation pushing widespread adoption of AMI (advanced metering infrastructure) in Europe, and other parts of the world such as Canada, intelligent meters are becoming more commonplace, and as a result, M2M has entered the home in much larger numbers throughout regions with more pervasive intelligent metering.

In North America, where intelligent metering is gaining traction, but has yet to be government mandated on a large scale, only 16% of all M2M connections are home centric, according to ABI Research. In comparison, that figure rises to 43% for Europe, and for regions like Scandinavia and Italy, where regulatory-inspired smart-metering projects began some years ago, the percentage of home-based M2M connections stands at more than 65%.

Traditionally, smart metering solutions were installed with the intention of helping utilities improve their operations, but with the advent of AMI, or the two-way communication between the home and the utility, smart metering is now part of energy-management consumer applications. And the proliferation of AMI infrastructure couldn’t come at a better time.

“All of our ears are greatly attuned to the idea of managing energy or controlling energy and minimizing costs,” says Gohn.

With an AMI infrastructure in place, consumers can use in-home displays to monitor their realtime energy use, receive information on pricing during peak events, and adjust energy consumption levels in response.

“AMI … now allows the consumer to have the information and to have the ability to opt in to various control mechanisms so that they can modulate their use,” explains Gohn. He adds one of the opt-in programs that consumers can agree to participate is one in which energy loads are controlled by the utility. For example, a homeowner gives the utility permission to raise the setting on the home’s HVAC system by several degrees during a peak event, thereby reducing the energy consumption for that home.

Gohn points out, “That’s really where the most exciting penetration for this technology will be in the homes because it won’t be just (in) the top 1% or 2% of homes it’s going to be rolled out for entire regions.”

IN THE CAR
Like the home, the consumer vehicle has garnered a lot of attention from the M2M community. Some of the most notable consumer-focused automotive M2M applications involve auto insurance, vehicle-tracking as part of loan terms for borrowers with bad credit and after-market service.

What these three applications have in common is their impact on the consumer wallet. “With (consumers) in particular, it’s all about the wallet. The wallet is on everyone’s mind right now,” explains Kyocera’s Fledderjohn.

With PAYD (pay-as-you-drive) insurance, consumers save money on their auto insurance if they drive less. For consumers with bad credit, agreeing to have a vehicle tracking device may be the only way to obtain a car loan with a reasonable interest rate. And when it comes to fuel prices, anything that helps ensure the fuel efficiency of a car—such as telematics offerings that catch potential mileage-impacting mechanical problems—is appealing to the consumer.

Using M2M to improve vehicle performance has been prevalent in commercial markets for quite some time, but as drivers continue to feel the pinch at the pump, these applications certainly captured consumer attention.

“It started out with fleets, but the individual consumers are obviously worried about the same things because they’re (also experiencing) the higher costs of fuel,” says Shawn Aleman, vice president business development, Xirgo Technologies LLC, www.xirgotech.com, Camarillo, Calif.

In the North American vehicle telematics market, OnStar has led the pack, dominating consumer marketshare for telematics offerings in the U.S. According to OnStar, it had 2.5 million subscribers at the end of 2003, and the company expects to have more than 5.8 million subscribers by the end of this year. If OnStar meets the projection, it will have experienced a 130% increase in its subscriber base during a five-year period.

“What was really successful in the U.S. was the business model,” says Ralf Hug, vice president product management and marketing, Airbiquity, www.airbiquity.com, Seattle, Wash., regarding OnStar’s success in the U.S. market. He points out carmakers in this market decided to put this equipment in as many vehicles as possible, while in comparison Europe chose to only offer it as an option.

While the telematics market continues to gain significant marketshare, there are still some cost factors that have to be sorted out in order to meet consumers’ expectations. Aleman explains, “The end customer is not concerned much about the technology rather than overall cost of ownership. … The hardware costs have come down quite a bit during the last couple years. But I don’t think the network costs (of communicating vehicle data) have come down as much. The recurring cost is what I believe is preventing a lot of consumers from adopting the technology.”

FOR YOUR HEALTH
Another area in which M2M has made significant inroads into the consumer world is healthcare. According to a report released earlier this year from ON World, www.onworld.com, San Diego, Calif., the use of wireless sensor networks—one of the key enabling technologies for M2M solutions—is growing within the healthcare industry, and the technology could save the healthcare industry $25 billion in 2012 by reducing hospitalizations and extending independent living for seniors.

Analysts say two of the most promising WSN (wireless sensor networking) healthcare solutions are AAL (ambient assisted living) and BSNs (body sensor networks), both of which are used directly by consumers.

AAL solutions give the elderly the ability to live independently longer. Using a network of sensors placed throughout the person’s home, caregivers and family members can remotely monitor the activity (and inactivity) of the person throughout the day to ensure his or her safety and well-being.

CMI (Community Management Initiative Inc.), www.simplyhome-cmi.com, Green Bay, Wis., is one company that provides AAL solutions. Its SimplyHome offering, which is based on technology from Alarm.com, uses a network of sensors, including motion detectors, door/window contacts, and a panic pendant, to keep caregivers informed on what’s happening in an elderly person’s home.

The system is directly shipped to the consumer, and the company says customers can set up the system in 20 minutes. Wireless sensors are placed throughout the home, and they communicate to a central base station that’s either placed on a counter or mounted to the wall. The base station then sends the information wirelessly to a central processing center.

The caregiver manages the “rules” for the system, such as the times of the day the front door should not be opened, through the Web. If the event occurs, an email or text message is sent to a designated contact person.

BSNs, on the other hand, are based on wearable or implantable devices that can sense vital signs such as heart rate, blood oxygen levels, or blood glucose levels. In the past, when a patient suffered from a heart attack or other abnormal occurrence, healthcare providers had to depend on symptoms conveyed by the patient and/or results from tests conducted after the fact in order to prescribe the right treatment.

BSNs give nurses and doctors the ability to access near-realtime data on vital signs, such as abnormal fluctuations in heart rate or blood glucose levels, as the event is happening or immediately following the event. In turn, consumers can better manage their own health and possibly reduce hospitalizations and doctor visits.

Moreover, remote healthcare monitoring solutions can also mean dollar savings for the consumer. Enfora’s Barrs calls attention to the example of glucose monitoring.

Unlike in the past when patients took glucose readings, but didn’t necessarily pass that data on to their doctor or other healthcare organization, with M2M-enabled devices, “those measurements are transmitted to a datacenter in realtime,” explains Barrs. He adds, “The benefits are Medicare, Medicaid, and other organizations steeply discount diabetic drugs and other types of precautionary pharmaceuticals from the standpoint that they are hoping they’re eliminating a hospital visit by taking precautionary care with the patients.”

Without these M2M-enabled medical devices, healthcare organizations simply had no way to confirm the patient was following the prescribed treatment plan.

“By having this availability to pass this data and have statistical information to them in realtime, they have the ability to continue discounting (prescriptions for) those folks that are managing their conditions by taking the discounted drugs and by taking those readings in a timely manner,” explains Barrs.

While BSNs and other remote monitoring technologies are far from being pervasive tools in today’s healthcare industry, interest is definitely growing.

According to Medtronic Inc., www.medtronic.com, Minneapolis, Minn., a provider of remote cardiac monitoring solutions, the number of consumers using its technology has grown significantly during the past several years. The company says today nearly 290,000 patients and 2,600 clinics use its remote monitoring technology, compared to the 50,000 patients and 550 clinics that were using the technology three years ago.

Moreover, Enfora is observing significant growth in M2M applications for the healthcare industry. According to Barrs, Enfora believes the volume of rollouts it will ship for healthcare applications in 2009 will likely match the number of those it will ship for security applications, which is currently Enfora’s top consumer M2M market.

INNOVATION TO COME
So, what can everyday Joe Smith expect from the M2M industry in the coming years? While the answer is not cut and dry, the possibilities are certainly endless.

Greg Jones, vice president marketing and business development, Sensorlogic, www.sensorlogic.com, Addison, Texas, says the consumer market is ready for M2M. Now, it’s just a matter of educating the SMBs (small-to-midsize businesses) and entrepreneurs that serve the consumer market that M2M technology is available at a reasonable price point.

“Our biggest issue right now is that people don’t know it’s possible (to get these consumer applications to market),” he explains. “We have, as an industry, a marketing challenge to get the word out that this stuff is doable. A lot of people are doing it today. It can be done cost effectively. And you can actually launch products fairly quickly.”

Jones adds, “As consumer apps start to really roll into the market, that’s also going to help raise market awareness about what might be possible. So, it could potentially (create) a snowball effect.”

Smart Energy, Courtesy of Google

Thursday, May 28th, 2009

Companies large and small are excited about smart metering, but one of the biggest companies to enter the space has been Google, www.google.com, Mountain View, Calif. Earlier this year, Google.org, the search-engine giant’s philanthropic arm, announced the PowerMeter system, designed to help consumers manage their energy consumption.

This week, Google announced the first utility partnerships for the PowerMeter initiative. Eight electric utilities in the United States, Canada, and India will help roll out the technology to consumers. PowerMeter is a Google gadget that lets consumers view information about their electricity consumption over the Web on their home computers. The software requires the use of smart meters, which the eight utility partners are implementing for customers, and which provide two-way data transfer between the customer and the utility.

Google’s partners range from utilities with millions of customers to utilities with only a few thousand customers. The PowerMeter partner utilities are: San Diego Gas & Electric, www.sdge.com, San Diego, Calif.; TXU Energy, www.txu.com, Dallas, Texas; JEA, www.jea.com, Jacksonville, Fla.; Reliance Energy, www.rel.co.in, Mumbai, India; Wisconsin Public Service Corp., www.wisconsinpublicservice.com, Green Bay, Wis.; White River Valley Electric Cooperative, www.whiteriver.org, Branson, Mo.; Toronto Hydro–Electric System Ltd., www.torontohydro.com, Toronto, Ont.; and Glasgow EPB, www.glasgowepb.net, Glasgow, Ky.

Google will also work with integration partner Itron, www.itron.com, Liberty Lake, Wash., for the project. Itron is a provider of intelligent metering, data collection, and utility software solutions.

In the future, Google plans to expand the number of customers and utilities using the PowerMeter system.

In the tech world, everybody used to break into hives at the slightest hint that the all-knowing, all-seeing Google was going to enter their business, providing free tools and doing everything better.
But slowly people realized that Google isn’t the best company to do everything. They don’t always win, and they may well not win here either.

First, where’s all that data going to come from? Sure, Barack Obama’s stimulus plan calls for 40 million more smart meters to be installed, but as we noted last year, the functionality of these little devices varies widely. Some track things in real-time, others don’t.

And they’re expensive. The sensors required to track all of the major appliances in your home would be hundreds of dollars and Google isn’t just going to send you a kit with all of the smart devices.

Absent the data gathering ecosystem, all Google is really offering you is a graphing utility. And we’ve already seen plenty of companies, including the guys who made Flash, offer up similar or better products.

To become the de facto window into your energy usage, Google will have to use their size and weight to bring some standardization to smart metering practices. To do that, they’ll need hardware manufacturers to come out with very cheap Google-ready devices and then they’ll have talk dozens of utilities into eschewing their own smart meter plans to follow Google’s lead.

Or they’ll have to get the government to mandate that Google’s approach is correct. This could be where Google earns its money. Some utilities aren’t really interested in helping consumers cut their usage — what they’re really after is just simply knowing how much power people are using at any given, so they know when they have to fire up their expensive, dirty peaker power plants. Smart-meter makers have responded with products that aren’t always consumer friendly or even consumer facing.

Google, on the other hand, has a vested interest in making sure that information is freely available in real-time and that it can be tied to real-time electricity pricing information. That’s a very consumer-friendly approach — and we’re glad to see someone pushing that agenda.

Carbon Reduction Commitment

Thursday, May 21st, 2009

The Carbon Reduction Commitment

Starting in April 2010, the Carbon Reduction Commitment is the UK’s first mandatory carbon trading scheme. The initial phase of the Carbon Reduction Commitment will be compulsory for organisations that consume over 6,000 MWh (6,000,000 kWh) of half-hourly metered electricity during the period from January 2008 to December 2008. At today’s prices, this is roughly equivalent to total half hourly electricity bills of approximately £500,000 per year.

The aim of the Carbon Reduction Commitment is to reduce the level of carbon emissions currently produced by the larger ‘low energy-intensive’ organisations by approximately 1.2 million tonnes of CO2 per year by 2020. As a Climate Change Bill commiment, the scheme is aiming for a 60% redution in CO2 emissions by 2050.

The Carbon Reduction Commitment will cover both public and private sector organisations. At present, the carbon reduction scheme is expected to affect approximately 5,000 organisations in the UK. In doing so, it is anticipated that the scheme will affect 25% of total business sector emissions within the UK.

The scheme will work in tandem with the existing European Union Emissions Trading Scheme and Climate Change Agreements. As a result, where emissions have been captured by the EU ETS and CCA, these emissions will not be captured by the CRC. In essence, the CRC is targeted at low energy-intensive users.

The Climate Change Bill also sets the enabling powers for the Carbon Reduction Commitment and sets out the role of the Climate Change Committee that will oversee much of the CRC scheme.

While the scheme doesn’t officially start until April 2010, many organisations will need to make preparations before that date to ensure that they comply with all legal requirements and fully participate in the scheme.

Carbon Reduction Commitment Timeline

2008 — the period from January 2008 to December 2008 will be used to identify which non-energy intensive organisations in the UK have consumed more than 6,000 MWh of half hourly metered electricity.

July 2009 – The Environment Agency will issue letters to the billing address of all half hourly metered properties asking organisations to identify whether or not they qualify for the Carbon Reduction Commitment

April 2010 – The Carbon Reduction Commitment scheme officially begins. This date will be used as both the start ot the 1st compliance year and the start of the ‘Footprint Year’

April to September 2010 – This is the official ‘Registration Period’

April 2011 – The 1st sale of allowances will take place in April 2011 and act as a ‘Double Sale’ to cover both the previous year emissions (actual), and the following year’s emissions (forecasted)

July 2011 – Each organisation must submit their Footprint Report by July 2011 and allowances must be surrended by this time.

October 2011 – The 1st Recycling Payment will be made with companies receiving their allowances plus/minus the bonus/penalty payment depending on their performance in the league table

The Benefits of the Carbon Reduction Commitment

The carbon reduction commitment presents a number of benefits to organisations that fall within the scheme.

Financial

The carbon reduction commitment sets out a clear risk to organisations that fail to reduce their carbon emissions. The financial implications could result in penalties of thousands, or even millions, of pounds for large organisations. However, there is also the opportunity for the best performing organisations to receive similarly large bonus payments as reward for their efforts.

Brand and Marketing

With the carbon reduction commitment league tables being published each year, the media will have full access to the performance information of all organisations that fall within the scheme. As such, the best performing organisations will benefit from recognition of their achievements.

Corporate Social Responsibility

Over time, organisations that make significant savings in the first few years will find it more and more difficult to achieve such high-level percentage savings on their carbon emissions. This could be considered as a negative aspect of the carbon reduction commitment scheme, as there will be less incentive for organisations to continue their commitment to reduce CO2. However, having reduced their carbon emissions, these organisations will enjoy long-term financial benefits from reduced energy costs.

What Is the Aim of the Carbon Reduction Commitment?

The British government is committed to reducing carbon emissions within the UK by 60% by 2050, in comparison to 1990 levels. As part of this commitment, in 2001 the government targeted energy intensive organisations to reduce their level of carbon emissions under the Climate Change Agreement. Subsequently, from 2010 the largest non-energy intensive organisations will be targeted via the Carbon Reduction Commitment.

What is the Cap and Trade Scheme?

The the carbon reduction commitment will use a cap and trade scheme will enable companies to start buying carbon allowances to cover their carbon emissions, and that will involve measuring and recording energy use and calculating carbon dioxide (CO2) emissions (not including transport emissions).

The revenue generated from carbon auctions will be redistributed between the scheme’s participants. Each company will receive a larger or smaller amount than they originally paid for their carbon allowance, according to their performance in the CRC league table.

CRC Compliance

The carbon reduction scheme is currently aimed at approximately 5,000 of the UK’s largest organisations, including supermarkets, banks, property management companies, government departments, hotel groups, food retail chains and local authorities.

Essentially, the carbon reduction commitment will affect organisations whose half hourly electricity consumption totals more than 6,000 MWh per year (equivalent to approximately £500,000 annual spend). Any organisation that falls within this category will be required to record account for all energy (other than transport fuels), including electricity, gas and oil.

Energy consumption during 2008 will be used as the qualifying year to identify if an organisation will be subject to the Carbon Reduction Commiment. Records of electricity use will be taken from mandatory half hourly meters, voluntary half hourly meters, remote read meter readings and pseudo hal hourly meters.

If the total of all of these half hourly meter readin exceeds 6,000,000 kWh during 2008 then you wll fall within the scheme. Either way, if you have any half hourly meter readings, you will have to declare whether or not you qualify for the scheme during April to Septeber 2010 (updated date).

During summer 2009, the environment agency will issue a letter to the billing address of every organisation in the UK that has an electricity meter that records half hourly readings. The letter will ask for these organisations to identify whether the entire organisation uses more than 6,000 MWh of HH electricity and therefore be required to enter into the carbon reduction commitment scheme, or not.

Organisations may be exempt from the Carbon Reduction Commitment scheme if they have a large Climate Change Agreement. Declarations of exemption due to CCA will need to be made by 31st July 2011 (revised date from 31st July 2010).

Organisational Structure

In identifying the organisational structure, it should be a relatively simple process where the organisation and/or subsidiaries are owned and operated in the UK. However, where a qualifying organisation has a foreign owner, the owner will be required to appoint of an agent to act on behalf of the subsidiaries within the UK. In doing so, regardless of whether or not the agent has direct control over the subsidiaries, they will be able to act as a representative to group all subsidiaries as one.

CRC Definition of an Organisation

Under the carbon reduction commitment, an organisation is defined as the ultimate parent company.

Where the parent company is located outside the United Kingdom, the organisation must nominate one of its UK sites to be responsible for compliance to the carbon reduction commitment for all of its UK subsidiaries.

CRC and State-funded Schools

The government has proposed that state-funded schools (including academies) within Great Britain, will participate within the carbon reduction commitment scheme under the umbrella of their local authority. In doing so, it is the carbon footprint of the local authority that will be legally and financially responsible for participation in the carbon reduction commitment scheme, rather than the individual schools.

It is also the local authority that will be positioned within the carbon reduction commitment, rather than the individual schools.
The local authority will be subject to a number of obligations and duties including:

* Responsibility for calculating all local authority missions including state funded schools and academies
* Purchasing allowances to Cover the above permissions
* Monitoring and reporting annual energy consumption and surrendering allowances where appropriate
* Maintaining the evidence pack for auditing

However, while the local authority will be legally responsible under the carbon reduction commitment, a duty will be placed on schools to require them to supply the local authority with annual energy consumption data. At a minimum, the data will need to be provided to the local authority at least once a year and would typically take the form of complete energy invoices for all non-transport electricity and fuel consumption.

Local Authorities should be prepared to provide advice and services to schools, to ensure that they collectively reduce energy consumption, secure a high place in the CRC league and avoid penalties and fines.

CRC Benefits for Schools and Local Authorities

Under the carbon reduction commitment, local authorities will be held legally and financially responsible for state funded schools within their geographical area. As such, the CRC aims to increase energy management practice between local authorities and the schools that fall under their umbrella.

Local authorities will be incentivised to assist schools with resources and energy management advice so as to ensure lower carbon emissions and a higher place in the CRC league table. In doing so, the local authority will benefit from better corporate social responsibility and reduced financial impact of the CRC, with the potential to receive substantial funding from bonus payments when allowances are recycled.

Schools will be required to provide their local authority with the necessary energy and emissions data for the carbon reduction commitment. While there will be an administrative cost and time associated with these tasks, it should be significantly outweighed by the benefits of increased energy efficiency.

In receiving energy management advice from the local authorities, schools should be able to significantly reduce energy consumption and costs. In most circumstances, it is considered likely that schools should be able to reduce energy consumption by over 20% by adopting no-cost or low-cost measures to reduce energy consumption.

CRC Reporting for Schools

Under the carbon reduction scheme, local authorities will be responsible for reporting at least 90% of their total emissions, including state-funded schools and academies.

Indicator 185, of the new Local Government Performance Framework in England, will require schools to provide their local authority with the necessary emissions data to fulfil this obligation.

The statutory local government performance indicator EEF/001a will require schools in Wales to report their emissions data to their local authority.

Local authorities should already be collecting information from schools that fall within their responsibility to the CRC.

CRC and Private Schools

Independent (writer) schools will be required to enter into the carbon reduction commitment if their highest parent organisation consumes more than 6000 MWh of half hourly metered electricity per year. Electricity consumption within private schools will not be included in any local authority involvement in the carbon reduction commitment.

CRC and Half Hourly Meters

Organisations will be required to participate in the carbon reduction commitment, if their total half hourly metered electricity exceeds 6,000 MWh from 1 January 2008 to 31 December 2008.

For the purpose of determining the scheme qualification, the government has proposed that the definition of “half hourly metering” will include all meters that monitor electricity consumption on a half hourly basis. To this end, half hourly metering will include voluntary automatic meters that produce half hourly data. The definition will also include pseudo half hourly meters (irrespective of whether or not they are settled on the non-half hourly market).

The above approach has been implemented to address the risk of large organisations choosing to settle half hourly metered electricity on the non-half hourly market, and thereby falling outside the Carbon Reduction Commitment.

Carbon Reduction Commitment Exemptions

In particular circumstances, some organisations in the UK will not be affected by the carbon reduction commitment. Where an organisation already has 90% of its emissions covered by the EU Emissions Trading Scheme or the Climate Change Agreement, it may be exempt from being included in the carbon reduction commitment.

Direct emissions covered by the European Union’s emissions trading scheme are exempt.

Under the climate change agreement, a subsidiary will be exempt if more than 25% of the total energy is covered by the CCA.

Transport fuels are excluded from the carbon reduction commitment.

CRC and CCA

The carbon reduction commitment (CRC) will be exempt from organisations that have more than 25% of their energy and emissions covered by a climate change agreement (CCA). However, these organisations will still be required to register under the CRC in order to set out their legal position.

During the initial stages of registration for the carbon reduction commitment, organisations that are subject to a CCA should still report all half hourly to figures for 2008 in order to be assessed for exemption. Where exemption applies to part of an organisation, the remainder will still be liable to report under the carbon reduction commitment if the total remaining half hourly metered electricity consumption was over 6000 MWh during 2008.

Landlord And Tenant Responsibilities

Where a landlord and tenant arrangement exists, regardless of who owns the property, who occupies the property or ultimately who uses the energy. In all situations, the responsibility to report under the CRC will lie with whichever organisation has a direct contract with the energy supplier.

This arrangement exists for both the half hourly electricity consumption liability and preliminary reporting, as well as the CRC’s requirement for annual compliance.

Significant Subsidiaries

A significant subsidiary is any part of a larger organisation that in itself consumed more than 6000 MWh of half hourly electricity during 2008. In this circumstance, the significant subsidiary may be able to enter into the carbon reduction commitment scheme in isolation from the rest of its parent or group organisation.

By entering any significant subsidiaries into the carbon reduction scheme as an entity in their own right, the parent or group organisation may benefit by separating itself from the subsidiary and brands, marketing, financial or practical implications that would otherwise exist.

CRC Management

As the Carbon Reduction Commitment continues to develop, it is clear that organisations involved in the scheme will need to set aside significant resources if they are to maximise the benefits of the CRC.

Even where the desire is only to obtain legal compliance, businesses will still need to invest time in ensuring that they have identified the entire organisational structure and accounted for a minimum of 90% of all emissions.

Carbon Reduction Commitment Action Plan

In developing a Carbon Reduction Commitment action plan, the first thing that any organisation will need to do is to understand their liability.

The ‘Organisation’

The full organisational structure of any company will need to be ascertained to identify whether or not it will be required to enter into the carbon reduction commitment scheme.

Total Half Hourly Electricity Consumption

Organisations will need to assess all the consumption from their half hourly electricity meters during 2008 to calculate whether or not they exceed the 6,000 MWh threshold.

Exemptions

Further investigation will be needed to look at areas of the organisation may be exempt under CCA, EUETS, or ‘Significant Subsidiaries’ rules, to better identify the organisation’s total liability to the Carbon Reduction Commitment scheme.

90% Emissions Rule

The next stage of the process will be to identify a minimum of 90% of the organisation’s total emissions covered by any combination of Climate Change Agreements, EU European Trading Scheme and core sources of non-transport energy consumption. Where all of the above do not account for the minimum threshold, non-core sources of energy will need to be accounted for and submitted to reach the required is 90% mark.

Identify Opportunities

organisations will need to investigate had opportunities to reduce energy consumption. A marginal abatement cost curve can help in this process by providing a tool to communicate investment required to reach compliance with the carbon reduction commitment and demonstrate that priorities have been investigated.

Targets

In developing the action plan it is important to identify what you aim to achieve. To this end, you may be simply looking for compliance with the law. However, you may be looking for the potential financial rewards that can be gained from the bonus payments. Additionally, you may be especially interested in the brand and marketing potential of being a leading organisation in the Carbon Reduction Commitment league table.

Early Action Metrics

The early action metrics form 100% of the league table assessment criteria during the first year of the carbon reduction commitments scheme. Essentially are two areas in which an organisation can qualify for bonus payments under the early action metrics. The first of these can be obtained by achieving the Carbon Trust Standard.

Carbon Trust Standard

The Carbon Trust Standard essentially requires an organisation to calculate its carbon footprint (including transport), demonstrate absolute or relative reduction in carbon emissions by more than 2.5 percent per year, and demonstrate good carbon management.

In order to qualify as an early action metric, an organisation must have received the Carbon Trust Standard by March 2011. By obtaining the Carbon Trust Standard, the organisation will be eligible to receive half of the 10% bonus payment that can be awarded at the end of the first year of the Carbon Reduction Commitment scheme.

Automatic Meter Reading

Automatic Meter Reading forms the other half of the early action metric, and in doing so it provides the opportunity for organisations to receive half of the available bonus payment during the first year. In order to qualify, the automatic meter readings to cover both electricity and gas. The equipment must also meet a minimum standard in its ability to capture, store and retrieve data at half-hour intervals, and provide software to manipulate the data into usable data.

To do well in the Carbon Reduction Commitment, participants will need to:

Implement Automatic Meter Readers before March 2011
Sign up to the Carbon Trust Standard
Establish comprehensive monitoring and targeting mechanisms
Collect and record procedures
Assign repsponsibilities and ownership for energy reduction tasks
Carry out regular reviews of data collection
Reduce emissions within the scheme
Proactively develop a strategy to identify and implement future energy savings

First Year Action Plan

To the first year of the carbon reduction commitment, organisations should carry out a number of actions to make best use of the scheme.

The organisation should forecast its business as usual emissions.
Cost-effective abatement options should be identified and implemented at the first opportunity. During the first few years of the carbon reduction commitment, the fixed price of £12 per tonne of CO2 provides a simple costing of opportunities.
Organisations should also monitor all included sources of emissions, to identify the potential future opportunities and risks.
During the first year, organisations should decide on a strategy for purchasing allowances with consideration for the perceived cost of allowances in future years. Having bought allowances in April 2011 the organisation will then need to report and surrender the year one allowances by the end of July 2011.

Organisations will need to make careful allowance for the cash flow implications of purchasing allowances that are subsequently tied up approximately 6 months before they are returned with either bonus payments or penalty deductions attached.

During the second year of the carbon reduction commitment scheme, organisations will need to carry out similar operations as those outlined above. However, they will also need to make either balancing sales all purchases on the secondary market to adjust their allowances before reporting and surrendering by the end of July 2012.

 

90 Percent Emissions Rule

The Carbon Reduction Commitment’s 90 percent emissions rule, otherwse known as the ‘flexible de minimis’ rule, requires all particpants to account for at least 90% of their total carbon footprint emissions. The 90% rule aims to focus attention on the largest, and most cost effective, opportunities to reduce carbon emissions.

The 90% emissions rule can include all energy reported through the Climate Change Agreement, European Union Emissions Trading Scheme, as well as all ‘Core Sources’ of non-transport energy consumption.

Where any organisation has identified all of the above, but is still unable to reach the 90% minimum, it will be required to identify enough ‘Non-core’ non-transport sources of energy to reach the required 90% threshold.

During the initial energy assessment for the Carbon Reduction Commiment, particpants must attempt to report 100% of emissions. Beyond this period, opportunities exist for organisations to opt-in the non-core sources of energy consumption if they wish to do so.

By opting-in, organisations have the opportunity to include existing energy consumption that may have considerable potential to be reduced in the future. Naturally, this would increase an organisations total carbon liability, but it may still be a worthwhile option if the reductions are made in the future.

Core and Non-Core Sources

Within the carbon reduction commitment, energy consumption is divided into ‘core sources’ and ‘non-core sources’.

Core sources will typically include all electricity and non-transport fuel those provided as a constant supply and invoiced on a regular or monthly basis. It will be mandatory for all organisations to report their core sources of energy,

Non-core sources will generally include more ad hoc energy supply, including some bulk fuels. Organisations will only be required to record their non-core sources if they are unable to identify a minimum of 90% total carbon emissions from the core sources.

Automatic Meter Reading Standards

As of January 2009, the required standards for automatic meter reading equipment have not yet been published. However, during summer 2008 the government published draft consultation on the Carbon Reduction Commitment and it is considered that the standards published in that document will not change with regards to Automatic Meter Reading equipment.

In essence, Automatic Meter Reading equipment will need to meet minimum standards in the way that it collates and stores data, including the frequency with which it carries out this process (at least every half an hour). The Automatic Meter Reading system will then need to manipulate and present the data (probably via a software package) so that it can be easily understood and used to reduce energy consumption.

The official standards for Automatic Meter Reading equipment are due to be published in the first quarter of 2009

Core and Non-Core Sources

Within the carbon reduction commitment, energy consumption is divided into ‘core sources’ and ‘non-core sources’.

Core sources will typically include all electricity and non-transport fuel those provided as a constant supply and invoiced on a regular or monthly basis. It will be mandatory for all organisations to report their core sources of energy,

Non-core sources will generally include more ad hoc energy supply, including some bulk fuels. Organisations will only be required to record their non-core sources if they are unable to identify a minimum of 90% total carbon emissions from the core sources.

Emissions Factors

In calculating the carbon emissions with regards to electricity consumption within organisations and subject to the carbon reduction commitment, a five-year average emissions factor will be applied to all electricity. To this end, the same factor will be used to measure emissions from all organisations regardless of whether or not they purchased their grid electricity supply from a wind power, nuclear, coal powered or any other form of electricity generation scheme.

However, if you produce your own on-site renewable electricity and you do not claim renewable obligation certificates, then you will be able to submit this use of electricity as zero emissions.If you claoim ROCs you will have to apply electriicty emissions at grid emission ratings.

Evidence Packs

All participants in the Carbon Reduction Commitment will be required to produce evidence packs in case of an audit. The evidence pack must include:

Structural Records – with clear definitions for the structure of the organisation. Information on implmentin early action metrics and growth metric across all subsidiaries.

Data Records – to show the annual organisation-wide energy consumption. Estimated bills can be used, but they must be idenitifed in the evience pack. Standard unmetered supplies UMS billing methodology is considered to be ‘estimates’. An upward adjustment factor of 10% will be applied to estimated consumption. The evidence pack must also provide evidence of actual readings for at least 6 consecutive months of the year.
Special event records – to identify unusual activity from, such as acquisitions

The evidence pack must be signed by a Director of the company

What type of energy is included in the Carbon Reduction Commitment?

Whilst qualification for the Carbon Reduction Commitment determined by electricity use, it aims to capture all non-transport energy consumption. As a result, if you’re in the Carbon Reduction Scheme, you will be required to report on electricity, gas, oil, diesel etc.

Core sources in the CRC includes all half hourly metered electricity, profile class 5 to 8 electricity, daily metered gas and non-daily metered gas over 73,200kWh per annum.

90% emissions rule means that of your entire organisaiton’s carbon footprint, you will be to be able to show that 90% has been captured by the EUETS, CCA and/or the ‘core sources’ of the CRC ‘. If the total comes to less than 90%, you will be required to opt-in to reportin on additional non-core sources to reach the 90% level. The first year assessment of the 90% rule will be made during the period from April 2010 to March 2011 (the frist year of the scheme). This reporting must be must be reported by 31st July 2011.

If you’re in the Carbon Reduction Commitment, but you also have liabilities under the Climate Change Agreement and/or European Union Emissions Trading Scheme, then those emission will not be covered by the CRC.

 

Carbon Commitment Reduction Enforcement

The environment agency has overall responsibility to enforce the carbon reduction commitment in its capacity as the scheme administrator. Regional regulators will be tasked with carrying out the necessary audit of 20% of participants each year.

Carbon Reduction Commitment Audits

The Carbon Reduction Commiment will operate on the basis of participiants recording and reporting their own emissions to the scheme. As such, their level of emissions will not necessarily be subject to any verification. However, 20% of all particpants will be audited annually; via a rolling programme of desk-based audits that will be carried out throughout the year.

Carbon Reduction Commitment Evidence Packs

Organisations will be required to provide evidence pack’s that will include:

The details of the organisation
Annual energy consumption throughout the organisation
Details of early action metric throughout the organisation
Details of growth metric throughout the organisation
As above for all significant subsidiaries
Structural records, data records and special events

 

What is the Annual Reporting for the Carbon Reduction Scheme?

Annual reporting for the Carbon Reduction Scheme will fall in line with the financial year compliance cycle, from April to March, as opposed to the original reporting that was based on calendar year reports from Januaury to December.

Organisation within the Carbon Reduction Commitment will be required to maintain an evidence pack, and a source list of all emissions included in the CRC.

Additional rules will apply to the reporting on the generation of renewable energy, exporting power from your own energy generation and the use of combined heat and power.

At the end of each reporting year (March 31) you will be required to submit your report by the end of July. At this point he will also be required to surrender allowances that will be equal to your level of emissions, where 1 allowance wil be equal to 1 tonne of CO2.

The carbon reduction commitment scheme is based on audits rather than verification. As such, you will not be required to verify your commission’s statement, which differs from exiting EUETS schemes. However, the audit process wl cover 20% of al participants each year.

 

CRC Costs

The Carbon Reduction Commitment will typically result in a range of costs for participating organisations. These could include administration and consultancy advice, implementation of new technology, as well as the potential for fines and penalties due to non-compliance or poor performance.

However, in the long term, it is likely that most organisations will enjoy significant financial benefits due to improved efficiency and lower energy costs.

For some organisation that do well on the CRC league table, the Carbon Reduction Commitment presents the opportunity to benefit from bonus payments that could more than outweigh any financial investment.

 

CRC Fines

If a company fails to register by the required deadline it could receive a fine of £5,000, plus an additional £500 per day, until it is successfully registered on the scheme.

Where an annual report is submitted late, the fine looks as though it could be £5,000 + £0.05 per tonne of allocated allowances per working day

Where submitted carbon emission details are more than 5% variation from actual, a fine of £40 per tonne of allocated annual allowances (compared to £12 per tonne of first phase allowance costs).

Where an evidence pack is incomplete or not up to date – £5 per tonne of allocated allowances.

Non conformance will be treated as a civil offence. However, failure to respond to subsequent demands will lead to issue being treated as a criminal offence.

 

Carbon Reduction Commitment Allowances

Having identified their total annual CO2 emissions, participating organisations will have to purchase carbon allowances at a fixed price of £12 per tonne during the first three years. The initial three-year introductory phase of the carbon reduction commitment scheme will run from the beginning of April 2010 to the end of March 2013. However, allowances will not be sold until the end of the first year, at which point all organisations within the scheme can purchase allowances for both the previous and forthcoming years.

When purchasing allowances, organisations will be allowed to purchase unlimited quantity and bank these allowances for future years, but only within each phase of the carbon reduction commitment scheme. To this end, participants may purchase several years allowances in 2011, but cannot be banked beyond the end of March 2013.

There are no free allowances in the scheme. All allowances must be bought and sold, and cannot be borrowed between organisations for any period.

The revenue raised from the sale of Carbon Reduction Commitment allowances will be recycled into the scheme. The income received in April will be issued back to participants, with bonus or penalty adjustments, in October of the same year. As a result, there will be cash flow implications during the period from April to October while all organisations in the scheme wait for the revenues to be recycled.

In April 2013 the carbon reduction commitment will adopt an auction trading mechanism for allowances, using sealed bids.

 

Carbon Reduction Commitment Bonus and Penalties

The carbon reduction commitment aims to use a bonus and penalty scheme as part of the incentive for organisations to reduce their levels of emissions. Any bonus for penalty administered to an organisation will be based on their position in the league tables.

During the first year of the carbon reduction commitment scheme, the early action metric will act as the sole indicator of performance for organisations within the league tables, however the end of the third year, the early action metric will be removed from the league table calculation. From that point onward, all organisations will be measured largely (75%) on absolute emissions and partially (25%) on the growth metric.

During the second year the margins for bonus and penalty will increase to 20%, with 30% being applied to the third year and so on. By the fifth year, organisations in the top half of the table will receive a bonus, whereas all the organisations in the bottom half will receive a penalty.

Year 1 – max 10% ./- bonus or penalty
Year 2 – max 20% ./- bonus or penalty
Year 3 – max 30% ./- bonus or penalty
Year 4 – max 40% ./- bonus or penalty
Year 5 – max 50% ./- bonus or penalty

Following the initial five-year period, the bonus and penalty has yet to be established. However, it is expected that the government will continue to take advice from the climate change committee and has not ruled out a 100% bonus and penalty scheme. As such, companies at the bottom of the league table would not receive any of their allowance payments back.

There are no requirements for organisations to reinvest bonus payments to further reduce energy by investing in green technology or services.

 

Carbon Reduction Commitment Emissions Trading Scheme

The carbon reduction commitment emissions trading scheme will target of emissions that are not currently included in the European Union’s emissions trading scheme all climate change agreements. It is anticipated that the trading scheme will affect approximately 5000 of the UK’s largest organisations.

During the initial phase of the carbon reduction commitments emissions trading scheme, starting 2010, all allowances will be sold at a fixed price of £12 per tonne of CO2. However, it is anticipated that from 2013, all allowances will be allocated through auctions that will develop a market price. Over time, the number of available credits will diminish which is likely to drive up the price.

 

Carbon Reduction Commitment Recycle Payments

The carbon reduction commitment’s recycle payments will take place over three stages.

First stage – based payment

During the first year, from April 2010 to March 2011, calculations will be made to identify each organisation’s share of the total carbon covered by the scheme. This percentage share will then be used for all subsequent years. The percentage share will then be multiplied by the recycled pot

Second stage – bonus or penalty

During the first year, the organisation at the top of the league table will receive only 10% bonus.

Adjustment factor

The adjustment factor will be applied to all participants of the scheme to ensure that there are enough finances in the total pot to make payment of the recycles

 

Carbon Reduction Commitment Action Plan

Whilst the carbon reduction commitments does not officially start until April 2010, there is still a large amount of work that many organisations may have to do prior to that date.

Identify organisational structure

The carbon reduction commitments operates under special rules that may mean some organisations will be included in the scheme even though they think they are too small and energy user to have two participate. To this end, it is imperative that all companies identify exactly where they fit in with larger parent or group organisations, and where at how each will be liable to the carbon reduction commitment.

The carbon reduction scheme applies at the highest level of the organisation, except where there are significant subsidiaries. Significant subsidiaries are defined as individual energy uses that in themselves consumed more than 6000 MWh during 2008. As such, the significant subsidiary could be included into the carbon reduction commitment scheme in its own right, and made separate from the rest of the organisation.

Organisations will also need to identify which parts of their energy consumption already fall under climate change agreements and the EU emission trading schemes; and therefore be excluded from the carbon reduction commitment. One these elements have been identified, the total needs to be calculated to account at least 90% of the organisation’s total carbon footprint

Electricity consumption

Having identified the organisational structure, the next step will be to ascertain the total amount of electricity consumption from all half hour meters. If the sum exceeds 6000 MWh during 2008 in the organisation will fall under the carbon reduction commitment scheme.

 

CRC League Table

The Carbon Reduction Commitment league table will rank all participants in the scheme on the basis of performance in three metrics.

 

Carbon Reduction Commitment League Table

The Carbon Reduction Commitment league table will rank all participants in the scheme on the basis of performance in three metrics.

First metric – Absolute Emissions

The first metric will look at the percentage of carbon emissions reduction for the organisation compared to the previous year. The absolute emissions metric will be based on a rolling average period of the past five years so, on any given year, the organisation will be compared with the previous five years. During the initial five-year period of the scheme, organisations will only be compared against the years that have passed since the start of the scheme. In the first year, ‘Absolute Emission’ will not be included in the league table calculations.

Second Metric – Growth

The second metric will consider the percentage reduction in other carbon emissions per unit of turnover, which aims to recognise the growth of companies. As with the absolute emissions in the first metric, the second metric will operate on a rolling five-year comparison, but fewer years during the start of the scheme and not at all in the frist year.

Third Metric – Early

The early metric will consider early action initiatives made by the organisation to reduce their carbon emissions prior to April 2011. Qualification for the early action metric will require organisations to be assessed for coverage of the carbon trust standard and automatic meter readings. During the first year of the carbon reduction commitment scheme, the early action metric will act as the sole indicator of performance for organisations within the league tables

 

Carbon Reduction Commitment Publish League Tables

As part of the carbon reduction commitment, the Environment Agency will publish publicly accessible league tables of participants performance at the end of each year.

In addition to the published league table positions for organisations within the carbon reduction commitment, the scheme will also publish the responses to three questions:

1. Does your organisation disclose long-term carbon emission reduction targets?
2. Does your organisation disclose carbon emissions performance against these targets?
3. Do you have a named director with responsibility for overseeing carbon performance?

These questions are designed to indicate if participants are actively attempting to reduce their carbon emissions.

 

Growth Metric

As the growth metric is based on the percentage change based on production unit turnover, it may not always be possible to identify a measurable unit of production. In these circumstances, the growth metric will be based on emissions per unit of revenue.

Where the growth metric is based on revenue, the measurement will apply to the organisation’s total revenue, rather than just the area covered by the measured energy consumption.

If an organisation changes its structure or operations, the information will not be updated in the CRC until the start of the second phase.

If an organisation significantly reduces consumption as a result of ceasing operations in some areas of their business, they will be able to benefit from this reduction in the CRC league table.

Electrical Grid Connected Generation & DNO’s

Wednesday, May 20th, 2009

Grid Connected Generation

Terminology to Start

• Developer

– You!

• Distribution Network Owner/Operator (DNO)

– Owns, maintains, develops and operates the physical network
– SP Manweb, United Utilities in the North West
– Not the slightest bit interested in selling or buying energy from you

• Electricity Supplier

– Party to contract with to buy & sell energy
– Npower, PowerGen, Scottish Power, British Gas, etc…
– Not the slightest bit interested in the physical connection

• Ofgem

– Electricity and Gas Market regulator
– Also administers the ROC process if your technology is eligible

Just Some of the Legal Issues

• If grid connected, then it is a legal requirement to have permission to connect & operate any form of generation

– Needs to have a DNO connection agreement
– Needs to have correct electrical protection
– Needs to have correct earthing
– Needs to have an export meter (if exporting)
– Needs to have a supplier contract (if exporting)

• D-code : Distribution Code for UK Distribution Networks

• G-code : Grid Code for UK Transmission Networks

• Electricity at Work Regulations

Engineering Recommendations

• Technical connection requirements are detailed in the Engineering Recommendations

– DNOs view these as “Rules” rather than just “Recommendations”

• G83: Less than 6kW (16A/phase)

– No connection agreement required but must notify DNO once on

• G59: Less than 5MW and less than 20kV connection

– Must have a connection agreement

• G75: Anything else up to 50MW or transmission connected

– Must have a connection agreement

DNO Responsibilities

• Statutory obligations under the terms of their licence

– Secure operation and development of the network
– Safe & reliable operation of the network
– Ensure fair and equal access to the network
– Least cost options for connection
– Lifetime of network not just your connection

• Must respond to a connection application within 90 days. Remember, they’re not out to get you, but they have responsibilities too!

 Electrical Connection Issues

• Technical issues to be considered during connection study/investigation

– Thermal limits
– Voltage limits & step change
– Reverse power-flows through transformers
– Short-circuit rating of switchgear
– Protection arrangements & co-ordination
– Harmonics & Power Quality
– Transient stability (usually only for larger generators)

• Energy Metering

• There will be the need to provide a reasonable level of data on the generator and the site connections

• The connection and protection will need to be witnessed and approved by the DNO in order to complete the connection process

 Network Capacity Issues

• The Distribution Network has real limits

• Due to load growth and the drive towards maximising use of existing assets, available headroom is often quite limited

– Cable ratings reached during peak load
– Voltage drop/rise reached
– Circuit breaker short-circuit limits reached

• The Capacity Race

– It is not just fiction it is unfortunately real in some locations
– First-come, first-served & Interactive Applications
– There are some solutions but most do add cost and complexity

 Rule of Thumb Connection Capacities

< 6kW 240V
< 1MW 415V (3-phase)
< 1-10MW 11kV
< 30MW 33kV
< 50MW 66kV/132kV
> 50MW 132kV upwards & National Grid interfaces…

As with any project, the bigger the project, it is important that you have the right level of advice or expertise to de-risk the project.

 So, what do I do to get connected?

• Contact your friendly neighbourhood consultant ☺

But seriously:

• Start with a rough idea of what you want to do

– Check that your site can fit it and you can afford it
– Check that all other regulatory issues are okay

• Have an informal “chat” about connection possibilities with DNO generator connections or knowledgeable person

– Check that your initial idea still sounds sensible

 When contacting the DNO

• Contact DNO – generation connections (NOT Demand)

– The connection process will be more likely to be successful with good communication between the developer and the local DNO

• Determine your connection route: G83, G59 or G75
– This may have costs associated with it

• Be prepared for a process not just rubber stamping

– Planning & Information phase
– Detailed Design phase
– Installation phase
– Testing & Commissioning phase

 Working with the DNO

• Seek an early meeting to discuss your project

– Outline the scheme
– Discuss the DNO’s process for connections
– Request an indicative connection design and budgetary cost estimate with a split between contestable & non-contestable works

• Review your project

– Submit the formal connection application
– Remember to accept the connection offer!

• Submission of data to DNO

– Make sure that this is appropriate and timely to avoid delays

• Testing and Commissioning

– Plan in advance to avoid delays as staff will usually be quite busy

 Connection Charges

• Application Fees

– These vary between DNO and size and voltage level of project
– Complex projects may involve additional fees

• Connection Assets

– Developer will be expected to pay full costs for all sole-use assets

• Generation Use of System Charges

– Site dependent & in lieu of network reinforcement costs
– Each DNO has own policy in-line with Ofgem guidance

Competition in Connections

• Developer as two options:

– Get the DNO to do all works necessary for the connection
– 3rd party to provide all contestable works which DNO then adopts

• Contestable Works

– Supply & installation of any new assets up to the point of connection to the existing network. Adoption agreement required.

• Non-Contestable Works

– Any studies, reinforcement or installation on existing network
– Design & specification of any new assets, consents & way-leaves

• Note: The DNO will not get involved in any “on-site” works

 Finally, just when you thought it was too easy

Other non-electrical issues still need to be resolved

– Planning Permission?
– EIA, Emissions?
– Health & Safety?
– Commercial?
– Installation & transport?
– CDM?

Smart meters to become mandatory in UK

Monday, May 18th, 2009

The UK government revealed plans Monday to have smart meters installed in every UK home by 2020- but at what cost?

A new £9 billion scheme was announced Monday, a full three years after the Government intended to introduce the smart meters. The electronic smart meters read a household’s electricity and gas consumption and send the accurate information to the household’s energy provider. The idea behind the smart meters is that they will eliminate the need for someone to check energy levels- thus saving the energy companies money- and also quickly and accurately inform the consumer about energy overuse, saving the consumer money on energy bills, all while reducing overall energy use.

The smart meters are about the size of a small notebook, and are reportedly to cost about £340 per household. There are several different proposals as to how the smart meters will be managed, with the government’s preferred method seeing the energy companies responsible for the installation and maintenance and a third party handling the actual energy data.

The Government believes the energy reduction would ‘conservatively’ save each household £4 a year, or about £100 million throughout the UK. The energy companies say they will be able to offer consumers cheaper energy due to the reduction of operating costs.

£10bn smart electricity meter project could change consumer behaviour

Thursday, May 14th, 2009

The government’s to replace almost 50 million gas and electricity meters over 20 years is a golden prize for information and communications services firms.

Not only will it put an “always-on” communications link into every house, flat and office, and require the collection and storage of petabytes of information, but it has the potential to allow energy suppliers to control consumers’ energy consumption.

The government hopes information from smart meters will be enough to persuade consumers to use more off-peak energy. But if they do not, smart metering opens up the possibility for suppliers to ration consumption, by allowing them to switch off networked appliances at times of peak demand.

Key to this is the communications network. The government has proposed three possible scenarios. The option preferred by the government and energy suppliers is for a purpose-built independent third-party national network operator. This would allow energy suppliers to install and maintain the meters, without taking on the risks associated with running the communications and data storage network.

All homes with a telephone line already have a nominal 56kbps link. BT, the UK’s biggest fixed wire network operator, is keen to explore how this project might integrate with its plans, including its possible obligation, to provide to British homes.
The government’s to replace almost 50 million gas and electricity meters over 20 years is a golden prize for information and communications services firms.

Not only will it put an “always-on” communications link into every house, flat and office, and require the collection and storage of petabytes of information, but it has the potential to allow energy suppliers to control consumers’ energy consumption.

The government hopes information from smart meters will be enough to persuade consumers to use more off-peak energy. But if they do not, smart metering opens up the possibility for suppliers to ration consumption, by allowing them to switch off networked appliances at times of peak demand.
Key to this is the communications network. The government has proposed three possible scenarios. The option preferred by the government and energy suppliers is for a purpose-built independent third-party national network operator. This would allow energy suppliers to install and maintain the meters, without taking on the risks associated with running the communications and data storage network.

All homes with a telephone line already have a nominal 56kbps link. BT, the UK’s biggest fixed wire network operator, is keen to explore how this project might integrate with its plans, including its possible obligation, to provide a 2mbps broadbank link to British homes.

Reliable broadband essential

But linking smart meters to the telephone system, particularly a broadband network, might not work, says Mark England, managing director of electronics design specialist. Sentec licenses its smart meter designs to manufacturers which build units for the US and Italian markets.

He says broadband may be okay for consumers because they can usually afford to wait for their information. But energy firms cannot, especially if they are trying to manage consumption on the fly. Even though data rates of 100k a day may be all they need, the connection must be up 24×7. Britain’s broadband networks are not that reliable.

The government’s department of business (BERR) said it had talked to the energy department about whether a smart meter roll-out would make a universal broadband roll-out more cost-effective.

“Currently we believe that this is unlikely because firstly, the meters do not need the bandwidth of broadband, and secondly, energy suppliers need ‘always-on’ communications that consumers cannot switch off,” says a spokesman.

Smart meters offer the potential to introduce smart grids, which interconnect machines rather than people, says England. For example, the smart meter could become the portal to other networked devices such as home surveillance equipment, refrigerators or air-conditioning units. This would allow electricity suppliers (or owners) to switch devices on and off remotely to minimise peak loads.

It would also let suppliers offer innovative service packages, England says. One might be a consumer’s commitment to keep peak consumption below say 3kW in return for a cheaper price, but to suffer a trip if consumption goes above the limit.

“This means there is a lot more information flowing up and down in real time, so network reliability and guaranteed quality of service are mandatory,” he says.

England believes different physical networks will be optimised for the terrain. He says the cellular telephony network works fine in densely populated urban areas, but GSM modems presently cost more than the meter equipment. Rural areas may need cable and/or multiplexed wireless connections.

The key to cutting the UK’s carbon emissions is to reduce peak load and raise base load.

Petter Allison, director of smart metering at British Gas, told a recent conference that a 2% reduction in consumption would pay for the cost of smart meters. US experience suggests some consumers will change their behaviour. It shows cuts of 5% to 15% in energy consumption, says England.