UK Government publishes a prospectus for its smart meter implementation programme

As I mentioned yesterday, along with its Annual Energy Statement the UK Government has published a prospectus for Smart Meters. Jointly produced by the Department of Energy and Climate Change (DECC) and Ofgem (the UK’s electricity and gas market regulator), the ‘Smart Metering Implementation Programme – Prospectus’ can be found here.

As the prospectus points out, this is a huge programme, involving visits to 27 million homes and significant changes to the industry. Predicted benefits across the domestic and smaller non-domestic sectors are expected to be £17.8bn over the next twenty years and a net benefit of £7.2bn, mostly from reductions in energy consumption and cost savings in industry processes.

The document sets out proposals for how smart metering will be delivered, including design requirements, central communications, data management and the approach to rollout. Much of this is in the associated documents, including an updated impact assessments from DECC.

A key proposal is that within a home or business the smart meter installation will comprise smart meters for gas and electricity, a home area network to communicate between devices, and 'wide area network' equipment for communicating back to the supplier. Suppliers will also need to provide an in-home display of near real-time energy consumption information for consumers.

Full details are in the associated Statement of Design Requirements, which covers:

• A high-level list of requirements and functionalities. One aspect is the government’s view that a gas valve should be included in domestic meters that will enable remote enablement and disablement of supply.

 

• A proposal for the minimum information that should be displayed on the in-home display unit

• The need for open standards in the home area network.

• The proposal for the creation of a new central body to identify the most cost-effective solutions for smart metering data management and communications. ‘Given that communications technology is continuing to evolve we believe the wide area network communications module should be upgradable without the need for the meter to be exchanged.’

The document makes lots of detailed proposals on the design and delivery of a smart metering system - at this stage they are for consultation. Time is short to respond, though. Feedback on some of the key points is due by 28th September, with responses on the remaining, more detailed, aspects due by October 28th.  Full details are in the Prospectus.

The UK government has published what will be an annual statement on energy policy

The UK government yesterday published its first ever Annual Energy Statement.

The document sets out 32 actions of energy and climate change policy, although much of it has already been announced.  From an overall business/IT point of view the main points of interest (mainly for UK readers) are:

• Action 4: ‘Alongside this Statement, the Government and Ofgem (the UK’s electricity and gas market regulator) are together publishing a Prospectus for Smart Meters today’.

The document is here and will be of interest to all those ICT companies looking to get a slice of the action in the coming years. I’ll summarise the details shortly.

• Action 6: ‘We will keep the CRC under review and look at the future of Climate Change Agreements in order to ensure that we deliver significant improvements in energy efficiency with minimal complexity and policy overlap’.

In the detail, the paper says that ‘We will keep the operation of this scheme (CRC) under active review with a particular eye on simplifying it and ensuring it properly incentivises those
who do most to improve energy efficiency. We will aim to introduce changes ahead of the capped phase’.

The comment may well grab the attention of Intellect, the UK IT industry trade body. Intellect has consistently lobbied against the way the CRC is implemented because of its potential negative impact on the ICT sector, both financially and in reputations. Intellect has considered the establishment of a Climate Change Agreement (CCA) because a CCA allows an energy intensive industry sector to opt out of the CRC by negotiating its own carbon reduction targets. But with the CRC still likely to change and CCAs having an uncertain future (and the potential for reform of the Climate Change Levy - CCL) the long-term situation is still not clear.

• Action 8: ‘All 17 central Government Departments now have comprehensive plans in place to meet the 10% reduction target and all have a real-time energy display in place’.

This refers to the additional 10% reduction in emissions that the new government is looking for in its first 12 months in office. Having recently been involved in some research around green IT in the public sector IT, all I can say is that the IT operations had significant reservations about whether they could achieve this target.

• Action 15: ‘In the autumn, the Government will publish proposals to reform the Climate Change Levy in order to provide more certainty and support to the carbon price. Subject
to the outcome of that consultation, the Government intends to bring forward relevant legislation in Finance Bill 2011’.

The Climate Change Levy is basically a commercial energy tax. The CCAs (see above) can get significant discounts on CCL payments through achieving their own carbon reduction targets, so changes to the CCL with have an impact on CCAs.

• Action 16: ‘We are pressing for the EU to move from the current 20% target to a 30% target for GHG emission reductions by 2020’.

This is not new. The EU has proposed the higher target if other countries sign up to equally ambitious targets.

Google and Intel increase their use of renewable energy

Google has reported that it has just signed a 20-year agreement with NextEra for the supply of green energy. On July 30th the company will start buying the power from the 114 megawatts generated by the NextEra wind farm in Iowa, US, enough to supply several data centres.

This long-term agreement gives the wind farm developers some financial stability for further clean energy projects. In fact, as we reported back in May, Google has already invested $38.8m in two wind farms developed by NextEra Energy Resources.  Located in North Dakota, they generate 169.5 megawatts of electricity.

Although Google is buying the energy directly from the source, the company can’t use it directly, so is selling it back to the grid in the regional spot market. But it does mean that Google no longer needs to buy the equivalent Renewable Energy Certificates (REC) to establish its investment in green power. As the company points out, this direct purchasing deal over a long period is likely to have a greater impact on the renewable industry than simply buying ‘naked’ RECs from third parties.

Meanwhile, Intel has continued its solar energy plans with installations in Folsom, California, and Chandler, Arizona, now up and running. The Folsom installation, across 5.5 acres, is the company’s biggest to-date and will provide 25% of the building’s peak energy demands - more than 1.5 megawatts annually. The Chandler solar roof system will generate around 10% of the building’s energy peak demand.

Intel continues to top the EPA Green Power Partnership – the ranking of green power purchasers in the US. In the April 2010 list the company reported that 51% of its energy is green with the purchase of 1.4 billion kilowatt-hours annually (although that does include RECs), ahead of any other company. Dell was in 5th place with 0.4 billion kilowatt-hours (more than it actually uses in the US) and Cisco was 7th with a similar amount.

 

It’s great to see major IT players so active in the green energy market. Google has fingers in may green pies, but Intel is getting on with its long-term renewable energy plans and Dell is buying more green power than it actually uses in the US. It sets a good example and its even better when the investment is direct, in wind farms and solar installations, rather than in third-party RECs. It shows the ‘green’ face of an industry that could easily be seen as a polluter and puts a different spin on green IT.

US climate change bill falls, but government efforts to reduce emissions continue

The Democrats have abandoned attempts to get a comprehensive climate change bill through the US senate.

The bill was along the lines of the House of Representatives bill, passed last year, aimed at using cap-and-trade legislation to reduce US carbon emissions by 17% by 2020, compared with 2005 levels, with 42% cuts by 2030 and 83% by 2050.

Even a watered-down version, addressing the electricity sector only rather than all large polluters, failed to get the required support from 60 Senators. The Republicans hold 41 of the 100 Senate seats and were not prepared to support the Green legislation.

A much narrower bill will be introduced, but its main focus is in addressing the issues raised by the Gulf of Mexico oil spill and supporting energy efficiency developments.  With elections coming in November and the Republican party expected to make gains, there is little prospect of achieving anything more for the foreseeable future. (Coincidentally, China Daily reported this week that China will begin a domestic carbon trading scheme sometime between 2011 and 2015 to help it meet its 2020 carbon intensity target).

 

It’s depressing news, mainly because other countries may see a lack of legislation in the US as an excuse for inaction. Understandably, many countries do not want to introduce measures that may make their industry less competitive internationally if others are not doing the same. On the other hand, lack of legislation in the US may hold back the development of a green economy, to the advantage of other countries.

In any case, lack of legislation does not mean lack of action, and the Obama legislation is doing what it can where it can. Just this week The White House announced that the Federal Government will reduce greenhouse gas pollution from indirect sources, such as employee travel and commuting, by 13% by 2020. This is in addition to the greenhouse gas reduction target from direct sources set in January this year.

The IT sector is also doing its bit. Plans to consolidate federal data centres and move to cloud computing are to be incorporated into fiscal 2012 budgets.  There was also a recent report from CDW Government that said that 77% of government agencies are implementing some form of virtualization and almost 90% are seeing the benefits.

Grid Net and Oracle join up to deliver smart grid/smart meter solutions

Grid Net and Oracle have announced that they’ll be working together on advanced distribution management systems and meter data management technology for utilities’ Smart Grid deployments.

Grid Net is a privately-held smart grid company that develops IP-based software to handle transmission of electricity over power grids and also smart meter software. Back in March Cisco announced that it had bought a stake in the company. Joining up with Oracle means that Grid Net will be able to offer Oracle’s utility solutions alongside its own, as well as getting access to Oracle’s established utility sector customers.

But in the dynamic smart grid/smart meter market, where favoured technologies and solutions are yet to emerge, this will not be an exclusive arrangement. The market has massive potential in the long-term, so all players will be looking to spread their favours in the hope of winning a slice of the action.

Grid Net, for example, sees its 4G WIMAX integration as a product differentiator, but the tie-in with Oracle will expand its market opportunities. Oracle is also a partner with smart meter telemetry company Sensus, which, as I reported a couple of weeks ago, has joined Arqiva in its trial of long range radio-based communications for smart grids.

AT Kearney announces that it has achieved carbon neutrality

Management consulting firm AT Kearney has announced that it has achieved carbon neutrality across its worldwide operations. In so doing it says that it is ‘fulfilling its first-in-the-industry 2007 pledge to be carbon neutral in 2010’.

For those who don’t know, AT Kearney has a long history but spent 10 years as part of EDS before a management buyout in 2006, just two years before EDS itself fell to HP. The company now has 1,700 consultants in 54 offices in 37 countries.

AT Kearney explains that it’s approach to carbon neutrality is built on four planks:

• measuring its carbon footprint

• instigating greener practices in offices

• implementing new models for client-service delivery

• investing in climate-protecting projects, i.e. offsets.

The firm points out that since it established its baseline metrics in 2007 it achieved a 5% reduction in emissions in 2008, a 14% reduction in 2009, and is aspiring to a 20% reduction in 2010.

 

The company has clearly made efforts to reduce emissions, but how carbon neutrality has been achieved deserves closer examination.

By my calculations the expectation is that by the end of 2010 emissions will be down by about a third on 2007 levels. But lets put this in context.  The Kyoto protocol looked to developed nations to reduce emissions by around 8% by 2012 on 1990 levels. The UK and Europe are now also looking to reduce emissions by around 30% by 2020, based on 1990 figures.

In AT Kearney’s case more than 80% of emissions come from travel.  That’s not likely to have changed much over the years and the extent of travel will be closely related to revenue.  A quick search suggests that the company’s revenue in 2007 was about four times what it was in 1990. So the 35% reduction on 2007 means emissions are probably still 2-3 times higher than they were in 1990.

In AT Kearney’s case, becoming carbon neutral is primarily achieved by the purchasing of offsets. The firm talks of ‘climate-protecting projects meeting the highest international quality standards’. I’m sure they are, but not all offsets are achieving the savings they are intended to, there is a limited number of quality offset schemes to go round and they’re not the solution for addressing emissions in the economy as a whole.

The real emphasis needs to be on reducing emissions internally. AT Kearney points to travel as the main cause, but talks about its sophisticated tools for calculating emissions from travel, not about the use of alternatives, such as videoconferencing and teleconferencing, to reduce them. Cutting down on travel is a controversial issue in the consulting industry, but it will be necessary part of reducing emissions in the longer term.

Of course AT Kearney is not alone. Many consultancy organisations are having to address their emissions, a lot of them in the IT sector. The saving grace is that, as AT Kearney puts it; “The firm’s carbon neutrality is part of a broader initiative designed to deliver sustainable, environmentally sound results to A.T. Kearney’s global client base”.  In a nutshell, consultancies need to be leading by example.  But where they make most impact is probably in the advice they give to a broad base of corporate clients.

Hara comes to the UK with its Environmental and Energy Management solution

Hara has been in the news recently with several notable wins for its Environmental and Energy Management (Hara EEM) solution. It was cited as an ‘Emerging Leader’ in the Enterprise Carbon Accounting market by research company Groom Energy Research in a report at the beginning of the year, and recent announcements seem to consolidate its position in these market sectors.

On June 23rd the company announced that toys and games company Hasbro had selected the EEM solution to support its corporate social responsibility commitments around energy usage and environmental impact. Shortly afterwards, on July 8th, the city of Las Vegas announced it would be using Hara to pull together the city’s energy and natural resource emissions data and manage sustainability initiatives.

But perhaps the most significant is this week’s news that UK-based Reed Elsevier, a major publisher and information provider, will be using Hara EEM to measure and monitor its global environmental performance. One reason for needing the solution is to conform with mandatory reporting schemes such as the CRC Energy Efficiency Scheme.

The deal is important because although Hara’s solution is deployed in more than 90 countries, much of that seems to be as the result of sales to US-headquartered companies. Reed Elsevier is Hara’s first deal to a significant company based in the UK (where legislation is pushing the market).

An international effort, particularly into Europe, is likely to be a significant part of Hara’s strategy in the coming months and years. The company is less than two years old, founded by former executives from SAP and Oracle and with $20m invested since initial funding in 2008. As a start-up in a competitive market, it needs to expand rapidly to build its business and reputation. There will be some UK and Europe-based carbon solutions providers taking note of Hara’s arrival in the UK.