ENEL Responds to My Status Request

November 30, 2009 at 7:21 pm

My in box today contained a terrific reply to my recent blog posting by ENEL, the Italian utility with 32 million electric customers. Here’s ENEL’s complete, unedited response with my brief observations inserted:

In a recent article (“Whatever Happened with ENEL, the World’s Largest Smart Meter Deployment?” posted on October 2nd 2009) you asked about the status of Enel, Italy’s largest power company and the world leader in Smart Grid development. We are happy to report that Enel, after having installed 32 million smart meters to its domestic customers, is now in the process of installing 13 million smart meters in the homes of customers of its Spanish subsidiary Endesa. [CK: as perspective, these 45 million smart meters compare to the Obama Administration’s goal of 40 million U.S. smart meters ultimately resulting from the Stimulus Bill Smart Grid grants and related projects.]

As the US begins to move forward with a number of pilot Smart Grid projects, some data can be helpful to understand the phenomenon in Europe. In 2008, Enel’s unique Automatic Meter Management (AMM) system automatically executed 250 million remote readings (collected on a bi-monthly basis from residential customers in the regulated market and on a monthly basis from small businesses and residential customers in the free market) [CK: the emerging global smart meter standard is daily data collection from all customers, including in the U.S., Canada, Australia, and Scandinavia.] and more than 12 million remote operations. Due to Enel’s foresight and leadership, Enel began its innovation program of installing smart meters in 2001. [CK: Enel was a true visionary at the time.] One result is that the average number of minutes of service interruption per customer per year dropped from 128 minutes to 49 minutes,[CK: one U.S. study said residential customers would pay about $5 (3 Euros) to avoid a one hour outage; based on that study, the value to Enel’s customers of the reduced outage minutes cited here would be 126 million Euros – per year.] and the related costs decreased significantly from 80 euros per customer to current 49 euros per customer per year. [CK: that works out to 992 million Euros per year!] The Enel AMM Solution represents a worldwide cost efficiency benchmark.

Enel customers, both residential and industrial, enjoy a number of benefits from the company’s automated metering approach. Dynamic pricing options, where power pricing options change every 15 minutes based on the status of energy demand and generation, are available to Enel’s large business customers, the ones likely to benefit the most from this technology.

Residential and small business customers have a simpler, easy-to-use set of rates that vary by time of day that does not require a great deal of their time and attention. The meter allows power billing in accordance with different tariff profiles on a multi-hour, daily, weekly and seasonal basis. It also provides data on the total energy consumed during the current and the last previous billing period (two months for households, one month for small businesses and free market). [CK: the emerging international standard here is hourly data for 13 months, allowing year over year comparisons as well.] In particular, the meter stores and shows on its display the energy consumption data related to each active tariff rate for the current and the last previous billing period.[CK: in the U.S. PowerCentsDC™ “Smart Grid Capitol” program, customers had this information on their smart thermostats.]

In 2008, smart meters collected 50 million load curves (equivalent to 1 sample every 15 minutes). The collection of load curves allows to link the energy consumption data related to each active tariff rate to a specific week, a specific day and a specific temporal segment of the day.

Enel customers can currently read their energy consumption, rates, and contract on the meter display; Enel smart meters are also ready to provide access to detailed usage data (such as consumption graphs) via an in-home display connected to the meter, and will begin providing this new service, as well as detailing the specifics of the service, as soon as it is approved by the Italian Energy Authority (AEEG). [CK: this is great news for consumers!]

The article also referred to demand-response choices, which are retail rate options, such as information on the cost of energy. The Italian power sector is a fully unbundled one between Retailers and Distribution System Operators (DSO), and within this framework Enel Distribuzione, as a DSO, is in charge of the AMM-related services. In turn, it is retailers who manage contractual relations with households. [CK: deregulated retail markets are still figuring out how to make demand response work well.]

The power consumption data collected by the AMM system is available to all the retailers in the market, facilitating the supply of a complete set of flexible rate schemes to customers. More than 2.5 million households have already subscribed to receive innovative rates (such as the flexible-rate structures shown below) and the switch rate is around 5%/year. Overall, about 8% of the 32 million Enel customers have chosen flexible rates. [CK: the 22% weekend discount is especially impressive.]

Examples of flexible-rate structures:

NIGHT: lower price for energy
consumption from 7pm to 1am (TOU)

WEEKEND: lower price for energy
consumption on Saturday+Sunday (TOU)

8pm-7am: lower price for energy
consumption on from 8pm to 7am (TOU)

To sum up, the Enel AMM solution is already providing huge benefits to the customers in terms of:

  • Transparency: the customer can read his energy consumption, rates, and contract on the meter display; [CK: I would be interested in any empirical data of consumers viewing the display and responding to the information.]
  • Billing based on up-to-date meter readings;
  • Flexible rate structures with the possibility of daily, weekly, monthly and seasonal modulation, together with flexibility of billing periods, depending on the retailer’s offer; [CK: experience has shown these electricity pricing choices to favored more by consumers – and to result in greater bill savings – than choice of retail provider. Of course, it’s not an “either or” question, and both pricing and provider choices can work hand in hand.]
  • Remote and fast contract changes (connections, disconnections, rates, voltage, subscription transfers etc.), performed by the contact center, eliminating customer inconvenience of on-site visits;
  • No more human error in meter readings, reducing complaints and disputes;
  • Reduction of power disruption events and repair time
  • Increase of comfort and consumption optimization.

The installation of Enel AMM system has stimulated and actively contributed to building a competitive market, supporting energy efficiency and savings in customers’ bills. Enel continues to be the world leader in Smart electricity, and, as always, the company continues to upgrade and advance the technology and its capabilities and benefits to all its customers. [CK: Enel truly deserves a lot of credit, and I look forward to their additional progress.]

Thanks for your interest in Enel’s AMM solution. [CK: and many thanks to Enel!]

Best regards

Enel Press Office

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How Can Smart Meters Save Europe €120 Billion? UK Announces Visionary Smart Meter Policy


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