
	April 2008

What is the Smart Grid and Can It Save Energy?

The power industry buzzes with talk of the Smart Grid, but not all parties agree on what the Smart Grid is. From the competing definitions emerge some common elements. Those elements include:

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Self-diagnosis and self-healing of network faults

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Coordinated operation across multiple systems and technologies

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Network management of the transmission and distribution network itself and the data and communication networks that support it

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A clear, consistent and knowable data model for describing the network and its operation

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Security for the transmission and distribution network itself and the data and communication networks that support it

As envisioned, the Smart Grid provides many benefits, chief among them reliability and efficiency. And the efficiency gains alone can be huge. In testimony before Congress in May of 2007, Commissioner Jon Wellinghof of the U.S. Federal Energy Regulatory Commission stated, "If we could make the electric grid even 5 percent more efficient, we would save more than 42 gigawatts of energy: the equivalent of production from 42 large coal-fired power plants. Those are plants that we would not need to build and emissions that we would not produce."

Multiple organizations, both public and private, are working to define and promote the Smart Grid. These include:

Electric Power Research Institute

GridWise Alliance

GridWise Architecture Council

Modern Grid Strategy

Galvin Initiative

IEEE

National Institute of Standards and Technology

As a provider of numerous innovative solutions for the energy industry, Itron is well positioned to play a key role in creating and shaping the Smart Grid. OpenWay® is Smart Metering for the Smart Grid, an enabling technology for creating a smarter grid. Our design, management, analysis, forecasting and presentation software solutions create value out of enabling technology. The knowledge built from the meter data and analytics provide a foundation for how to make the grid smarter.

The North American power grid is considered the largest machine on Earth and one of the crowning achievements of the 20th century. The Smart Grid could be one of the defining technologies of the 21st century. Stay tuned. Future articles in this newsletter will delve deeper into the emerging Smart Grid.

Itron and Silver Spring Networks Establish Partnership

Itron and Silver Spring Networks have executed an agreement to integrate Itron's OpenWay® advanced metering platform with Silver Spring's IP-based Smart Energy Networking solution. Under the terms of the agreement, the companies have addressed the technical, functional and solution delivery issues required to deliver a complete, fully supported advanced metering and meter data management solution with end-to-end IP connectivity.

"Consistent with the open, standards-based architecture of OpenWay, the integration with Silver Spring Networks provides our customers with an option for large-scale deployment of full IP communications that still leverages the benefits of the OpenWay advanced metering system," said Philip Mezey, senior vice president and chief operating officer for Itron North America. "We are very pleased to offer this capability to our customers, and it is yet another example of the flexible, open-architecture design of OpenWay."

"This relationship is exciting for our industry. Combining the capabilities of Itron advanced metering solutions with the open and scalable IP infrastructure of Silver Spring Networks sets a new level of performance for utilities looking for practical smart grid networking across their territory," said Scott Lang, president and chief executive officer of Silver Spring Networks. "This relationship is driven by strong customer interest and is in line with our strategy to offer a broad variety of flexible solutions to utilities."

Itron's OpenWay advanced meters combine open standards with advanced functionality, including ANSI C12.22-based standards compliance, interval data collection, time-of-use metering, load limiting remote disconnect, outage and meter tamper detection, remote firmware updates, as well as ZigBee®-based home area network connectivity. Silver Spring's Smart Energy Networking provides complete high-bandwidth IP-networking to meters and other smart grid devices, such as distribution automation, demand response, distributed generation and more, all with the most proven networking technologies available.

Product integration is underway, with commercial shipments expected in late 2008.

Last Chance: Upcoming Webinar to Highlight ZigBee® and its Role in Energy Management

According to the market intelligence company ON World, sales of ZigBee wireless network chip sets grew several hundred percent between 2004 and 2007. A number of those chip sets went to solutions that enhance energy conservation and management. In an upcoming webinar, you can learn more about this fast-growing technology and its role in energy management.

"The ZigBee mesh network protocol is driving adoption in large volume Wireless Sensor Network markets such as advanced metering infrastructure, building automation, and home automation and controls," according to Mareca Hatler, ON World director of research.

ZigBee is the global wireless language connecting dramatically different devices to work together. It offers a low-cost, low-power networking standard designed specifically for device-level communication in large-scale networks. Itron uses ZigBee for communication between household devices such as thermostats, the OpenWay® CENTRON® electricity meter, and ultimately the utility. Itron also uses ZigBee for communication between gas meter modules and OpenWay electricity meters. The ZigBee Smart Energy application profile, which will be released in May, supports energy management functions such as metering, demand response, load control, pricing, and network security.

The ZigBee Alliance—a global ecosystem of technology companies creating wireless solutions for use in energy, home, commercial and industrial applications—is hosting a webinar on April 24. The webinar features speakers from Atalum, Itron, Southern Californian Edison, and the ZigBee Alliance. You can click here to learn more about the webinar and register. The link also provides access to the recorded webinar, in case you missed it.

To read more about ON World's market research into ZigBee, please click here.

Advanced Metering Enables More Flexible Payment Options

Core functionality for advanced metering includes smart meters, two-way communication networks and remote service switches. In concert, these three features allow utilities to implement more flexible payment options, including prepayment. Increased payment options can benefit both consumers and utilities.

Increased payment options can help consumers match payment of their utility bills to cash flow and not a utility billing schedule.

Some flexible payment options, like prepayment, may preclude receiving a bill altogether, which can be a convenience for frequent travelers. Because flexible payment can reduce utility costs related to payment and collections, utilities can pass those savings on to customers in the form of lower rates for flexible payers. Flexible payment methods tied more closely to levels of energy consumption may even make consumers more aware of how much energy they use and thus spur conservation.

For utilities, flexible payment options can lower cost of billing. In the case of prepayment, it eliminates the cost of generating, printing, mailing and processing a bill. Flexible payment can also lower credit risks and the need for expensive field service calls. Accommodating customer lifestyles and cash flows can lead to reduced customer turnover.

Flexible payment is currently more common in Europe than in North America. Actaris, an Itron company, is a leader in flexible payment technology in Europe. As the digital revolution, in the form of AMI, continues to transform the utility industry, flexible payment will increasingly become another service that benefits both utilities and consumers.

For those interested in learning more, there's currently an animated prepayment scenario on Itron's website; click here to view it.