However, theIEA’s report notes that the “past year was a remarkable one from the pointof view of energy efficiency awareness. Never before have we seen somany initiatives from world leaders to put energy efficiency at the top ofthe agenda and to really back the rhetoric with action. . . . world leadershave sensed that sustainability begins with energy efficiency.”10 The reportmakes clear the extent of global interest in demand response solutions involving products such as smart meters.
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U.S. REGULATORS—GENERALLY POSITIVETOWARD ADVANCED METERINGU.S. National Energy Policy requires that utilities in the United States evaluate advanced metering and report to their respective Public Utility Commissions (PUCs) by the end of 2007. The majority of utilities have alreadytaken a close look at advanced metering and many utilities are currently invarious stages of evaluation, pilot programs, or implementation.The attitude of Public Utility Commissions (PUCs) is critical for the future of advanced metering since PUC regulators typically decide whether autility can recover its capital costs for advanced meters by passing throughthe cost to customers through higher electricity prices. A survey by UtiliPoint International found that the attitude among PUC regulators was positive toward advanced metering, with 35 percent of respondents sayingthey would allow full recovery of advanced metering capital costs, 39 percent saying they would allow partial recovery, and only 9 percent sayingthey would not allow rate increases (17 percent of the responses were “noreply”).11
WHAT IS AHEAD FOR THE SMART METERINDUSTRY?Now that utilities are getting a good look at the emerging smart meter products, their demands for even more sophisticated capabilities is rapidly expanding. The Director of AMR and Demand Response at UtiliPoint International, Patti Harper-Slaboszewicz, lists the requirements that utilities arenow generally asking for in smart meters:
r Interval or real-time meter data collection.r Low-cost, universal remote connect/disconnect under-the-glass.r Remote updating of firmware and all metering parameters.r Positive notification of outage detection/restoration.r Support for a home area network, including sharing price signals/loadcontrol messages to customer premise (ZigBee is often mentioned inthis regard).r Voltage alerts and logs.r Significant memory storage on endpoint (7 to 35 days is typical).r Robust provision of interval data (hourly or 15-minute are typicallyrequired).r Sufficient bandwidth to handle communications to and from the endpoints.
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r Net metering capability to enable consumers to put power back intothe grid.
r Open standard protocols preferred.12Many utilities have quickly recognized the benefits that smart meterscan provide, as seen by the list above. Ms. Harper-Slaboszewicz notes inher article that the following utilities are actively considering AMI smartmeter projects: Pacific Gas & Electric (PGE), Southern California Edison (SCE), San Diego Gas and Electric (SDG&E), DTE Energy, BaltimoreGas and Electric (BGE), Consolidated Edison (ConEd), TXU, CenterPoint,Energy East, Northeast Utilities, and many others.13The advanced metering industry is currently on the cusp of movingfrom the one-way AMR phase to a much more sophisticated phase involving two-way AMI communications systems. The move to AMI will pick upsteam going into 2008. Automatic meter reading sales in 2007 will continueto be relatively strong but there may be some slowdown in overall industrygrowth as utilities take time to investigate and conduct pilot programs forAMI. The meter industry is likely to see a decent year in 2007 and will thenstart to see a significant ramp-up in growth in 2008 and beyond as the moresophisticated AMI systems start to take off.There is every reason to be optimistic about the growth prospects foradvanced metering overseas where efficiency is being pushed even harderthan in the United States and where countries such as China and India arein the process of a huge build-out of new power plants and transmissionsystem assets to meet the demands of their fast-growing economies.The specific catalysts for the smart meter industry include (1) largerAMI pilot programs; (2) the roll-out of full AMI installations that are currently in the pilot stage; (3) demand for advanced metering solutions inEurope, Asia, and South America; (4) increased pressure for power efficiency from new government regulations such as higher renewable energystandards (which can typically be met in part with efficiency programs);and (5) the possibility that Congress may provide a tax break for smartmeters through accelerated depreciation for the utilities purchasing smartmeters.
INDUSTRY METER PENETRATION RATESAND UPGRADE OPPORTUNITIESThere is a significant opportunity for growth in the United States, but evenmore so globally, for solid-state digital electricity meters, one-way automated meter reading (AMR) systems, and two-way advanced metering infrastructure (AMI) systems.
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FIGURE 11.8 Potential for Electricity Meter Upgrades to Solid State from ElectromechanicalSources: The Scott Report, ABS Energy Research, and Itron, Inc. management estimates.
Of the 150 million electricity meters in the United States-Canada, about80 percent (120 million) are the old electromechanical meters and only20 percent (30 million) are the newer solid-state electricity meters (seeFigure 11.8). This leaves an upgrade base of 120 million old electromechanical electricity meters in the United States-Canada that could be replacedwith the new solid-state electricity meters. Globally, the penetration ratefor the newer solid-state meters is even lower at 15 percent, meaning thereare some 1 billion of the old electromechanical electricity meters that couldbe replaced by the new solid-state electricity meters.
SMART METER INDUSTRY GROWTH RATESThe annual growth rate for the new solid-state electricity meters was veryrapid at +50 percent over the 2000–2005 time frame in the United Statesand Canada.14 At the same time, sales of the older electromechanical electric meters fell by an annual rate of –15 percent during the same time framesince those meters are becoming obsolete. The annual growth rate forboth types of meters combined was 9 percent. This data is illustrated inFigure 11.9. Unit sales in the United States and Canada for solid-state
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FIGURE 11.9 Electricity Meter United States-Canada ShipmentsSource: Itron Inc. 10k annual report, management presentations, 2006.
electricity meters that had embedded AMR functionality grew at an annualrate of +17 percent during the 2000–2005 period.
ELECTRICITY METER MARKET SHARESIn the United States-Canadian market for electric meters that are capableof automatic meter reading, Itron has a leading share with about 53 percent of the market, followed by Cellnet (19 percent), ESCO Technologies(16 percent) and Hunt (9 percent), as illustrated in Figure 11.10. In theglobal electric AMR meter market, Itron/Actaris has a leading market sharewith 16 percent followed by Landis & Gyr with 14 percent, as illustrated inFigure 11.11.
r Itron Inc (Nasdaq: ITRI). Itron (www.itron.com) has a leading market share in North America and globally in the automatic meterreading electric meter segment. Itron’s new OpenWay product is anadvanced metering infrastructure system that provides two-way communications between a utility and its customers’ meters. Itron alsosells natural gas and water meters and provides various software and
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FIGURE 11.10 United States-Canada AMR Electric Meter Market SharesSource: Itron, Inc. management presentation and The Scott Report on AMR Deployments in North America, 10th ed.
data management services for large utilities. In April 2007, Itron completed the $1.7 billion acquisition of European-based Actaris MeteringSystems. Itron-Actaris had combined 2006 revenues of $1.659 billion.The acquisition reunited the former Schlumberger North American andEuropean meter divisions that were sold separately in previous years.
FIGURE 11.11 Global AMR Electric Meter Market SharesSource: Itron, Inc. management presentation and The Scott Report on AMR Deployments in North America, 10th ed.
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r Elster Metering (privately held). Elster Metering (www.elstermetering.com), a subsidiary of Ruhrgas Industries Group, had 9,000 employeesand 1.3 billion euros of revenues in 2005, according to company information. Ruhrgas Industries Group is a private company that wasbought by British firm CVC Capital Partners in 2005. In North America, Elster has three business units: Elster Electricity, which focuseson providing metering and metering system technology to electric utilities, AMCO Water Metering Systems, which provides metering products and meter reading solutions to water utilities, and Elster Integrated Solutions (EIS), which provides an AMR)/AMI system solutionsacross gas, electricity and water to multiutility customers.r Bayard Group (privately held). Bayard Group (see www.bayard.com.au) is a private equity investment group based in Australia thathas spent more than $2 billion to acquire several companies focused inthe power efficiency and smart meter sector. These companies includeLandis & Gyr, Hunt Technologies, CellNet, and Enermet. The combinedgroup has 700 million of annual sales and more than 4,000 employees,according to company information. Bayard Group says on its Web sitethat it intends to list on a public stock exchange in the next two tothree years. The principal shareholders of Bayard Group, according tocompany information, include DB Capital Partners (the private equityarm of Deutsche Asset Management in Australia), Allianz Capital Partners, Dubai International Capital, and various other private investors.The Bayard Group has acquired the following companies:r Landis & Gyr. Landis & Gyr (www.landisgyr.net) is a private company owned by Bayard Group. Landis & Gyr is based in Switzerlandand operates in 29 countries with about 4,000 employees. Landis &Gyr had sales in 2005 of 496 million euros. Products include electricity, gas and water meters and automated meter reading systems.r CellNet. CellNet (www.cellnet.com) was recently acquired byBayard Group for $705 million from major shareholder GTCR GolderRauner LLC (a Chicago-based private equity firm with $8 billionin capital) on November 30, 2006. CellNet provides equipment andmanaged services for the electricity, water and gas industries. CellNet, with its 10-year operating history, has an installed base of some11 million meters in the United States, according to company information.r Hunt Technologies. Hunt Technologies (huntechnologies.com),based in Pequot Lakes, Minnesota, has 330 employees and providesadvanced metering hardware and software products to electric, gasand water utilities.r ESCO Technologies (NYSE: ESE). ESCO Technologies (www.escotechnologies.com) operates in three segments: (1) the Filtration/Fluid
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segment, which provides a range of fluid filtration products and accounted for 38 percent of ESCO’s revenue in fiscal 2006 (endingSeptember 30, 2006); (2) the Test segment, which provides productsto measure and contain electromagnetic and acoustic energy and accounted for 28 percent of ESCO’s revenue in fiscal-2006; and (3) theCommunications segment, which is the segment that provides AMRelectric meter reading technologies and accounted for 34 percent ofESCO’s sales in fiscal 2006. ESCO’s subsidiary, Distribution ControlSystems Inc (DCSI), provides the TWACS® fixed-network AMI communication system that provides two-way communications betweenutilities and their electricity and gas customers with smart meters.ESCO was originally a subsidiary of Emerson Electric and was subsequently spun-off and migrated through a series of acquisitions anddivestitures. ESCO acquired Nexus Energy Software on November 29,2005, which provides software for energy meter applications. ESCO acquired Hexagram on February 1, 2006, which produces radio frequencyfixed network automatic meter reading systems for gas and water utilities. ESCO Technologies in fiscal 2006 (ended September 30, 2006) had$459 million in revenues.r Cannon Technologies (subsidiary of Cooper Power Systems NYSE:CBE). Cannon Technologies (www.cannontech.com), headquarteredin Minneapolis, Minnesota, provides load management and automateddistribution solutions to electric utilities. Cannon has over 400 electric utilities as clients and provides them with solutions to managepeak load, improve system power factor, read meters remotely, andimprove substation reliability. Cannon Technologies was acquired byCooper Industries Ltd (NYSE: CBE) in August 2006 and was foldedin the Cooper Power Systems division. The Cooper Power Systemsdivision, with about $900 million in revenues, manufacturers electricequipment (e.g., transformers, distribution switchgear, capacitors, protective relays, voltage regulators, etc.) and also provides engineeringservices for the electrical and industrial markets.r Sensus Metering Systems Inc (privately held). Sensus Metering Systems (www.sensus.com) is the largest global manufacturer of watermeters and has a 16 percent market share of the automatic water meter reading market in North America. The company is headquarteredin Raleigh, North Carolina, and operates globally with 35 facilities inthe United States and other countries. The company is a leading globalmanufacturer of gas and heat meters and is an emerging participantin the North American electric metering market with its iCon® solidstate electric meter. The company also produces pipe joining and repair products for water and natural gas utilities and is a supplier ofaluminum die castings.
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Sensus Metering Systems was formed in 2003 when a private equity group bought the Invensys Metering Systems Group from InvensysPLC (London: ISYS LN). The primary shareholders in the company areThe Resolute Fund (65.9 percent ownership) and GS Capital Partners(32.9 percent ownership). Sensus Metering Systems can trace its history back more than 100 years to the founding of the National MeterCompany in 1870 and the Pittsburgh Meter Company in 1886. SensusMetering Systems is a private company but publicly reports its financial statements to the SEC. The company has about 3,800 employees.Sensus Metering Systems in the fiscal year ended March 31, 2006, reported annual net sales of $613.9 million.r Comverge Inc (Nasdaq: COMV). Comverge, Inc. (www.comverge.com)provides demand response solutions to electric utilities, using a combination of systems including wireless communications, software, andhardware devices installed at utility customer locations such as smartmeters and smart thermostats. Comverge can sell a physical demandresponse system to a utility, or Comverge can provide its VirtualPeaking Capacity program to a utility, which is an outsourced peakmanagement service on a pay-for-performance basis. Through its demand response systems, Comverge can save electric utilities moneyby reducing peak power requirements and cutting operational costs.Comverge also has a Virtual SCADA System, which allows electric utilities to monitor and control distribution equipment and systems suchas substations, grid equipment and remote generators. Comverge estimates that its products have been installed in 3.3 percent of homesin the United States. Comverge in 2006 had revenues of $33.9 million.Converge went public in a $95 million IPO in April 2007.EnerNOC Inc (Nasdaq: ENOC). EnerNOC (www.enernoc.com),with 2006 sales of $26 million, provides demand response services toutilities and commercial/industrial electricity customers. EnerNOC enters long-term contracts with utilities to reduce the utility’s peak byinterfacing with utility customers and shedding electricity load duringtimes of peak demand. EnerNOC went public in a $97.5 million IPO inMay 2007.
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C H A P T E R 12
Power Storageand BackupSystemsWhen the Grid Just Won’t Do
t first glance, electricity storage systems may not seem to come under the heading of clean energy. However, electricity storage systemsare an important part of clean energy because they improve the quality and usefulness of electricity to consumers. Electricity storage systemscan also improve the overall efficiency of the grid, thus reducing the needfor new power plants. Moreover, if electricity storage systems (e.g., batteries) can be used for transportation vehicles on a mass scale, then we avoidthe need to burn fuel in internal combustion engines, thus reducing greenhouse gas emissions and pollution (assuming the original electricity usecame from renewable sources). Electricity storage systems by themselvesdon’t make electricity clean, but they do make a very important contribution to the usefulness and efficiency of the overall electricity system.There are number of ways that electricity storage systems are used.The first comes in powering the remarkable array of electronic equipmentand instruments that have been developed in recent decades. Computerequipment, medical equipment, scientific instruments, video equipment,and many other types of electronic equipment are very sensitive to variations in voltage or power spikes. In addition, businesses are now highlydependent on electricity to keep their operations running and any downtime from a power failure can quickly cost businesses a lot of lost revenue.There are also critical care facilities such as hospitals that cannot affordto have power spikes or blackouts since human lives are literally at stake.The bottom line is that few people can trust the grid anymore and manyhomes and businesses need to take matters into their own hands to provide regulated and backup electricity for their facilities.
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The need for electricity storage solutions also comes from new electricity generation sources such as wind and solar power, which are hampered by being intermittent and running only when the wind blows or thesun shines. Large-scale electricity storage solutions would allow wind andsolar parks to use the excess electricity they generate during the day tocharge up a storage system. The storage system could then provide electricity to maintain a continuous flow of electricity from the overall facilityeven when the wind or solar resource is offline. This would be a huge stepforward in bringing solar and wind power up to the 24/7 scale that is neededfor a complete and long-term renewable electricity solution.Large-scale electricity storage solutions would also be very useful forutilities. One of the properties of electricity is that it cannot easily bestored on a large-scale basis, which means that utility power companieswhen they generate electricity either “use it or lose it.” As a result, utilitiesspend a lot of extra money bringing power generation facilities up during the day and down at night in order to match generation with demand.Utilities would greatly benefit from having large-scale multimegawatt electric storage facilities that are charged at night when electricity demandis low and then provide the extra electricity during the day when electricity demand is high. This would allow utilities to generate electricityat a relatively constant rate 24 hours a day, taking care of peak requirements with stored electricity and thus reducing the overall power generating capacity that the utility must have available. That reduced capacitywould have a substantial impact on cutting the utility’s power generationcosts, a cost savings that could be passed through to consumers with lowerelectricity rates.Advanced electricity storage solutions would also be useful in thetransportation market. To the extent that electricity for a vehicle can bestored in an advanced battery or some other storage system, the vehiclewould not need to burn fuel in an internal combustion engine. That wouldbe a big step forward in reducing pollution and greenhouse gas emissionsfrom the transportation sector. Of course, the electricity that charges thevehicle’s batteries must be generated in a clean and renewable manneror else we would just be swapping transportation emissions for coal-firedplant emissions.One of the interesting things about electricity is that it does not necessarily need to be stored as electricity in order to be retrieved later. Itcan be stored in the form of water, compressed air, hydrogen, or mechanical energy. For example, many hydroelectric dams around the worldalready use a power storage system whereby excess electricity at nightcan be used to pump water into large tanks, which can then be drainedto drive turbines and generate extra electricity when the electricity isneeded during peak periods during the day. This is just one example of how
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electricity can be transferred into another type of energy, and then turnedback into electricity later. This topic will be discussed in more depth laterin the chapter.There are basically three ways to store electricity directly: batteries,supercapacitors, and superconducting magnetic energy storage. There arefour ways to store electricity in other energy forms to turn back into electricity later: pumped-hydro, compressed air, hydrogen for a fuel cell, ormechanical energy in a flywheel.
TYPES OF DIRECT ELECTRICITYSTORAGE SYSTEMSRechargeable BatteriesThe earliest storage of electricity was accomplished in 1745 when EwaldGeorg von Kleist invented what came to be known as the Leyden Jar.It stored electricity between two metal plates positioned close to eachother. Then, in 1800, Alessandro Volta invented the first practical electrical storage battery using alternating discs of zinc, copper, and pieces ofcardboard soaked in brine. The term “volt” was derived from Mr. Volta’sname.1Today, the global battery market is worth about $30 billion per year.About 90 percent of the batteries sold are nonrechargeable disposable batteries. These are called primary batteries. Only about 10 percent of thebatteries sold are rechargeable, but they account for about 63 percent ofthe revenue because they are more expensive. The rechargeable batteries,called secondary batteries, are divided into three main categories: transportation, industrial, and portable.There are seven different types of rechargeable chemical batteries. The fundamental principle of these batteries is the same, with thedifferences coming in the types of materials that are used inside thebattery.1. Lead acid. The lead-acid battery is 130 years old and is still the battery
with the largest use today. The lead-acid battery is the familiar batteryused in most automobiles. The lead-acid battery can be made in manysizes and can also be linked in chains so that the total system can beused as backup storage for large-scale industrial applications whereuninterrupted power is critical. About 73 percent of lead-acid batteriesare used in the automotive market with the remaining 27 percent in theindustrial market. The lead-acid battery is the least expensive batterymade.
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Lower-end lead-acid batteries are called “flooded batteries” because the liquid acid in the battery periodically requires topping offwith distilled water. The more advanced valve-regulated lead-acid(VRLA) batteries contain the acid in the form of a gel and the batteryrequires no maintenance. A lead-acid battery can be used in almostany position without leakage. Typical uses for lead-acid gel batteriesare wheel chairs, hospital equipment, emergency lighting, computerpower backup, and burglar alarm backups. Another big user is the motive market that includes electric vehicles like forklifts.2. Nickel cadmium. The nickel cadmium battery is another type ofrechargeable battery that also has been around a long time. It requiresless maintenance than the lead-acid battery, but it is environmentallyunfriendly because of the cadmium. The battery was used for a longtime in portable electronic devices like mobile phones and laptop computers but it has lost ground in those applications to newer types ofbatteries. Nickel cadmium batteries are generally used where long life,high discharge rate, and low price are important.3. Nickel-metal-hydride. The nickel-metal-hydride battery stores somewhat more energy that nickel cadmium but for a shorter period of time.A big advantage is that it is nontoxic. This type battery is used in manyhybrid electric cars. It is also used for telecom backup power and forconsumer electronics.4. Reusable alkaline. The reusable alkaline battery provides fewercharge/discharge cycles than other rechargeable batteries but it holdsits charge longer. These batteries are a relatively small part of the total market since most alkaline batteries are nonrechargeable. Typicaluses are for portable radios and flashlights.5. Lithium-ion. The lithium-ion battery is a newer technology. It canstore much more energy for its weight than most other types of batteries, but it is also more expensive. Typical applications include laptop computers and cellular phones. There is some controversy overthe safety of the lithium-ion battery because it can be unstable andthere have been some incidents where one has exploded or caughtfire causing some injuries. Lithium-ion batteries with special safety arrangements are already showing up in hybrid gasoline-electricity vehicles due to superior performance characteristics as compared with thenickel-metal-hydride batteries that have been used in hybrid vehiclesfor the past several years.6. Lithium-polymer. The lithium-polymer battery is the next generationlithium battery and is an improvement over the lithium-ion version because of its potentially lower cost. The lithium polymer battery is a
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solid polymer composite and does not need a metal case around it. Asa result it can be shaped to fit into whatever device is being powered.While it is safer than the lithium-ion battery, it is still subject to explosion or fire if it is recharged incorrectly.7. Sodium sulfur. The sodium sulfur battery is in wide use in Japan forstoring power during low usage periods for release during peak usage.The battery is also used to store power that is generated intermittently,such as in wind and solar power generation systems. The battery usesa beta alumina electrolyte that separates the positive sulfur and negative sodium electrodes. The electrons move back and forth betweenthe two electrodes depending on whether the battery is charging ordischarging. The advantages of this technology are that the batteryhas large energy density, high efficiency, and long-term reliability. Thebattery was designed for both long discharge durations, up to eighthours, but also has the capability to discharge rapidly with secondsto minutes of discharge duration.2 American Electric Power will beadding this battery technology to their systems in Ohio and Virginiain 2008.3
SupercapacitorsA capacitor stores electricity in an electrostatic field rather than in chemical form. A capacitor consists of two electrodes, or plates, of oppositepolarity separated by an electrolyte. The capacitor is charged by applyinga voltage across the terminals and that causes the ions in the electrolyte tomove to the electrode of the opposite polarity. Since the charge is only collected on the surface of the electrodes, a capacitor generally has very lowelectrical storage capacity. Two big advantages of a capacitor, however,are that (1) it can be charged or discharged very quickly; and (2) it canbe charged and discharged almost an unlimited number of times withoutcausing degradation in the equipment.A supercapacitor works just like a regular capacitor except that it ismade with electrodes that have extremely high surface areas so that theycan store greater amounts of electricity. Supercapacitors are being used astemporary backup power to provide power briefly until the main backuppower system can come on line. Supercapacitors are also being used inhybrid and electric cars to provide a quick burst of energy for quick acceleration. Larger supercapacitors of over 20 kilowatt-hours per square meterare still under development.One particularly interesting potential application for supercapacitorsis the possibility of using them as the main power source to propel an electric vehicle, rather than just as a small power booster as they are used now.
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A large-scale supercapacitor would allow a vehicle’s electrical propulsionsystem to be charged very quickly in a few minutes and the stored electricity would then allow the vehicle to operate on the roads for a matterof hours. This raises the possibility of having an electrical charge plug atthe average service station where the vehicle owner can stop to get a quickcharge, taking no more time than filling a vehicle with gasoline. This wouldeliminate the problem of the plug-in electric vehicles that are in operationnow that require a relatively long period of time to charge, longer than aperson would want to wait at a service station. Vehicles powered by largesuper capacitors would provide a way to bring electric-only vehicles to theroad in mass quantities, thus eliminating altogether the need for vehicleswith internal combustion engines that require gasoline or ethanol and thatemit CO2 and other contaminants.Maxwell Technologies, Inc (Nasdaq: MXWL) is a company that specializes in producing capacitors for power storage and delivery systems. Thecompany focuses on three lines of products: supercapacitors, high-voltagecapacitors, and radiation-mitigated microelectronic products. Supercapacitors are used in electric and hybrid-electric vehicles to provide some extrastored electricity that can be used when there is a need for a burst of powerfor passing or climbing hills. High voltage capacitors are used mainly inthe electric utility industry for protecting the grid. The radiation-mitigationtechnology is used mainly in the space and satellite industry. The companyhad annual revenue of $53.9 million in 2006.
Superconducting Magnetic Energy StorageSuperconducting magnetic energy storage systems store electrical energyin the magnetic field generated by a DC current flowing through a superconducting coil. The direct current stored in the magnet field can be convertedback into alternating current as needed. These systems operate at over 90percent efficiency. While today’s technology allows for very high bursts ofenergy, the bursts are very short.Superconductivity occurs in the coil when the wire in the coil is cooledto temperatures as low as –4