Demand-Side CO 2 Reduction Using Advanced Power Meters Electric Utilities Environment Conference Tucson, Arizona USA Ja

1. Demand-Side CO2 Reduction Using Advanced Power Meters Electric Utilities Environment Conference Tucson, Arizona USA January 22, 2007 Jeffrey H. Michel USCL Corporation / Carmichael, California USA Ing.- Büro Michel / Regis-Breitingen, Germany jeffrey.michel@gmx.net

2. Two Essential Developments Shaping the 21st Century • The precipitous warming of the Earth’s atmosphere by greenhouse gas (GHG) emissions from fossil fuel combustion • The omnipresence of electronic computers for data processing The immense computing power available to mankind is not yet being strategically employed to reduce and eliminate wherever possible energy usage contributing to climate change.

3. EU Kyoto Targets in Question Greenhouse gas emissions in the EU-15 states are diverging from a linear Kyoto reduction path to -8% by 2010 because of a 4.4% rise in CO2 emissions from fossil fuel use since the base year 1990. European Environment Agency: “Only two Member States — Sweden and the United Kingdom — expect that existing domestic policies and measures alone will be sufficient to meet or even exceed their burden-sharing targets. All others are projected to be significantly above their commitments with their existing domestic policies and measures.” (EEA Report 8/2005, p. 16)

4. Increasing Global Warming Risks Warming risks at parts per million by volume of CO2 Steadily rising CO2 concentrations in the atmosphere now present a high risk of exceeding a tolerable maximum global warming level of 2°C. Climate change up to the present “has already doubled the risk of heat waves (with) resulting unusually large numbers of heat-related deaths.” M.G.J. den Elzen, M. Meinshausen, Meeting the EU 2°C climate target: global and regional emission implications (Bilthoven: Netherlands Environmental Assessment Agency, Report 728001031/2005), pp. 6, 17.

5. Rising Prices, Yet Greater Consumption Price-driven efficiency technologies have lowered the energy input of many applications, but the number of applications worldwide has proliferated.

6. Market Trends vs. Climate Policy If overall carbon emissions are reduced to avoid exceeding a CO2 concentration of 450 ppmv, while current trends in aviation emissions remain unchecked, then ALL fossil fuel emissions in Europe by mid-century will be due to air travel. Decarbonising the UK. Energy for a Climate Conscious Future (Norwich: Tyndall Centre for Climate Change Research, 2005) p. 49.

7. Outdated Power Plants Produce over 1 kg CO2/kWh • Outdated power plants are operated worldwide to avoid investing in efficient but expensive new installations. • At RWE in Germany, 18 CO2-intensive lignite (brown coal) power plants have been in operation at four locations for over40 years. • The power industry produces 40% of global CO2 emissions and thus could contribute greatly to Kyoto fulfillment.

8. Confronting Climate Change with Distributed Computer Networks • Millions of computers already in service would hypothetically be available to monitor and control fossil fuel usage. • However, home computers in continuous operation might use more electricity than the energy they could save. • Data integrity from an indeterminate network of computers would require independent verification. • Only the usage habits of computer owners would be tracked.

9. The existing power meter infrastructure can be upgraded with microprocessors to implement a networked energy monitoring and control system. Meters are installed in every household and business. Electricity being measured likewise powers the meter. The meter microprocessor operates continuously to measure power consumption. Measurements performed with high accuracy requiring no third-party data verification. Standardized design reduces hardware and maintenance costs. Microprocessor-Based Power Meters

10. Emissions Trading as an Incentive to Fossil Fuel Efficiency • Years or even decades often intervene between fuel price increases and ensuing investments in fuel-efficient technologies. • CO2 emissions trading raises the incentive to make timely investments in lowering carbon fuel intensities. • The EU Emissions Trading Scheme (ETS) covers CO2 emissions in industrial installations, less than half (40% - 46%) of total greenhouse gases. • Various regions of North America are commited to carbon emissions trading. Several practices have already effectively included the utility customer into carbon emissions reduction strategies.

11. Demand Response: CO2 Reduction in the United States Demand response reduces the requirements for generating capacity reserves and thus provides CO2 avoidance. Real-time intercommunication between each power meter and the grid operator allows dynamic pricing signals and switching commands to be received by the customer.

12. Data Feedback for Demand-Side Efficiency The British study Towards Effective Energy Information (July 2003) has found that the monthly feedback of printed and graphical data to the customer offers potential sustained energy savings of 5 to 10%. Yearly billing still prevails in most of Europe. Monthly Comparisons Cross-Comparisons

13. Real-Time Pricing Enhances Consumer Awareness • Real-time pricing enhances the awareness of customers to economically achievable savings using feedback information on personal demand, aggregate grid load, and environmental costs. • By contrast, conventional decisions on usage rely on manual meter readings with no relationship to grid load or the environment. A portion of available energy resources is invariably lost to ineffective consumer usage decisions.

14. Demand-Side Deficits in Europe • Business and regulatory practices persisting from former closed energy markets • Low power demand of households without electrical climate control or water heating • Few power interruptions of significance • Inexpensive manual yearly billing procedures • Close alignment of the Emissions Trading Scheme toward existing power industry conditions, inhibiting any motivation to implement demand-side CO2 reduction

15. Promise of Demand-Response Techniques for Kyoto Compliance • Reliance on CO2-intensive power plants would be reduced, just as the need for certain generating capacities in the United States has been avoided by demand response. • The ability to align loads with available capacities would allow greater amounts of CO2-free wind and solar power to be used despite intermittent availability.

16. EU Directive 2006/32/EC: A Legal Framework Suitable for AMI • (Article 13) • Final customers shall be provided with competitively priced individual meters that accurately reflect the final customer's actual energy consumption and that provide information on actual time of use. • Billing shall be performed frequently enough to enable customers to regulate their own energy consumption. • Comparisons must be possible of current and past energy consumption, and of current consumption with an average normalised or benchmarked user of energy in the same user category.

17. AMI Cost Defrayment through Multiple Functionality • Customers: Multiple metering of power, water, heating, intrusion alarm, smoke alarm, medical emergency alarm (pendant transmitter), smart appliance and device control • Utilities: Service outage/restoration reporting, remote service connect & disconnect, theft of power reporting, over voltage and under voltage reporting, power factor monitoring, emergency disconnect, service personnel reporting • Prepayment “smart card” accounting for mutual cost benefits

18. Centralized Data Administration • An advanced power meter can function as a Network Gateway intercommunicating with: • monitoring, control, and display devices onthe premises via a wireless local area network and • utilities and other service providers via the Internet in an Advanced Metering Infrastructure AMI USCL Corporation

19. Demand-Side CO2 Reduction • Directive 2006/32/EC emphasizes that improved energy end-use efficiency will contribute to the "reduction of primary energy consumption, to the mitigation of CO2 and other greenhouse gas emissions and thereby to the prevention of dangerous climate change". • Usage decisions can therefore be directed to eliminating either fuels or emissions containing carbon. • CO2 can afford greater environmental benefits as the lead parameter, for instance, in preventing a switch to electricity from high-carbon fuels.

20. Private CO2 Allowance Purchases • Directive 2003/87/EC on emissions trading: EU allowances (EUA) may be transferred between any persons within the European Community. • While the trading registration fee generally excludes private individuals from participation, the allowances may be bought by registered agencies and subsequently resold. • Article 19 states that any person may hold allowances.

21. Deletion of CO2 Allowances TheCompensators (www.thecompensators.org) in Potsdam, Germany, is dedicated to deleting emission allowances from the EU Emissions Trading Scheme. The allowances are retired from trading by the purchaser. Svenska Naturskyddsföreningen (SNF), the largest environmental organization in Sweden, offers emissions certificates at http://skarv.snf.se/snf/co2/index.asp for 350 Kroner (about 39 euros, or 50 dollars) per ton. By the end of 2006, over 6000 people had purchased allowances to eliminate them from trading.

22. CO2 Trading at the Power Meter The ability to withdraw ETS allocations from circulation using a smart card terminal at each power meter would allow the public at large to exert a continuous, potentially massive influence on the climate-related pricing of electricity. The commercial risks inherent to planning and operating fossil fuel power plants would increase as allocations were removed from the market. Investments in renewable energies, on the other hand, would become more secure, reducing the need for public subsidies and fixed feed-in tariffs to promote their use.

23. Carbon Rationing for Precluding Resource Shortages Proposals for carbon rationing are prevalent in the United Kingdom, which experienced two wartime submarine blockades in the 20th century and is now confronted with dwindling fossil fuel supplies in the North Sea.

24. Equitable Fossil Fuel Rationing The allocation of equitable carbon allowances for fossil fuel emissions to all British citizens was first proposed in 1996 by Dr. David Fleming as Domestic Tradable Quotas (DTQs). Domestic Tradable Quotas: A policy instrument for reducing greenhouse gas emissions from energy use (Norwich: Tyndall Centre for Climate Change Research, December 2005). The allowances would be registered on a swipe card that could be inserted into utility meters for booking carbon credits.

25. CO2 Reduction Networks • AMI intercommunication capabilities allow energy data to be exchanged with other consumers. • The resulting enhanced transparency of energy usage can reveal additional CO2 reduction potentials that would not otherwise have been apparent. Cross-comparisons of heating energy usagein the German village of Heuersdorf have revealed high unsuspected variations in consumption.

26. Networked CO2 Avoidance • Metering service companies could use advanced meters to establish energy efficiency networks (CO2-free virtual power stations) for their customer base, reducing aggregate emissions. • Meter interlinks between photovoltaic installations would represent a distributed solar power plant.