This guest post was written by Varun Nagaraj, senior vice president of product management and marketing at Echelon Corporation, which develops energy networking technology.

Smart Meter, Boring topic

(Photo credit: miheco)

By Varun Nagaraj

In the U.S., smart meters get a lot of negative press. But the technology can provide visibility into what's been called the "black hole" our nation's grid infrastructure - the low voltage grid, which is the section between the neighborhood distribution transformer and the customer’s meter.

With nearly six million miles of low-voltage distribution lines in the U.S., Americans are paying for the energy we mismanage as it’s distributed. Researchers estimate a 10% gain in efficiency could have saved the U.S. $5.7 billion in 2006.

The data from smart meters can help identify these losses and reverse this trend. They can also play a key role in reducing outages, whichcost the U.S. up to $150 billion a year. We'd also be in a better position to incorporate more renewable energy and electric vehicles into the grid, or squeeze more life out of an aging distribution transformer fleet that needs to be replaced this decade at great cost.

Any of these would have positive benefits for our national economy and security. But America's negative perception of smart meters is causing the country to trail behind Europe, which is better positioned to profit from the technology.

After deploying smart meters, leading European utilities like Sweden's E.ON and Denmark's SEAS-NVE and NRGi have each been able to improve customer satisfaction. E.ON experienced a 56% reduction in meter and invoice-related customer service calls and a 50% drop in meter complaints.

The complaint rate at Denmark's SEAS-NVE was 10 times better than expected and never exceeded 0.5%. NRGi recently rolled out a program allowing consumers to get personal with their smart meters by customizing them directly. All these utilities offer smartphone and Internet apps that allow customers to see their energy usage anywhere at anytime, which is improving satisfaction and trust.

With these and more new services, they are building customer loyalty programs that stick. In testament that Europeans are becoming smarter energy consumers, SEAS-NVE reported a 16% energy savings after smart meters were installed.

Happier consumers trusting their utilities? How are Europeans doing it? For starters, European smart meter technology is fundamentally different. By using power line technology in the smart meter to communicate instead of radio frequency, many European utilities are able to neutralize RF-related health and privacy concerns that have bedeviled U.S. utilities like Pacific Gas & Electric.

Second, these European utilities conducted some groundbreaking marketing research to sell the benefits of the new meter that resonated with different types of consumers. They almost had to. In many places in Europe, meters are inside the home, sometimes in high traffic areas like kitchens. The utility needs access inside the home to install smart meters so customer experience and engagement could not be second-guessed or overlooked. Finally, once the meters were installed, they were reliably sending billing information back the same day - not months later like in some U.S. deployments.

Once reliable billing is provided, European utilities quickly move to gaining more visibility into their low voltage grid to remotely troubleshoot expensive problems like power quality issues and outages.

In Europe, utilities do this with smart meters that provide more than billing information – they tell the utility about power quality issues, such as voltage sag, swell and total harmonic distortion. They also help correct problems at transformers and pinpoint the source of outages by using power line communications that automatically show how customers are connected to transformers.

A great example of the smart meter payoff is in Denmark. At the start of 2012, there were approximately 100 solar installations on the SEAS-NVE grid; today there are over 3,500 adding 36 megawatts of capacity to the grid.

NRGi is seeing a similar explosion in solar installations. As a result, the need to monitor the low voltage grid has increased. In the past, most voltage quality investigations have been the result of customer complaints – for example, when customers experience dimming or flickering of lights.

But it's not just flickering lights that are a problem. When power is over or under voltage, it can shorten the life of expensive electrical equipment like televisions, computers and mobile phones. Before smart meters, the utilities would respond by sending crews to obtain initial readings and identify the severity of the fluctuations. If the crew could not immediately find the problem, they would install power quality recording devices - an approach that increases labor costs without providing a long-term fix.

Now by setting a series of alarms within their smart meters, these utilities can monitor and identify voltage quality problems at the same time as the customer, or even before the customer experiences any significant equipment malfunctions or failures.

This is helping them meet their obligation to customers and comply with regulatory mandates. SEAS-NVE estimates it was able to save over $1 million and when each of their 380,000 residents install solar, they'll save over $100 million.

And that's just the beginning. NRGi is collecting over 7 million data points from each meter a day. All this data means they never have a reason to visit the meter, until it's time for a replacement and that is saving them millions each year. In fact, NRGi believes smart meters will help them raise the efficiency of the grid so that it loses less energy in distribution - which will not only be good for the environment, but also make energy cheaper for their customers over time.