The impact of electric vehicles and the evolution of green billing

By Bastian Fischer, Vice President and General Manager EMEA, Oracle Utilities

Today, utilities around the world are faced with increasing pressure to help mitigate the negative environmental effects of electricity use. A European scheme to reduce carbon emissions has seen more than 1,600 cities from 36 European countries pledge to make their towns greener, and in the UK the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme has challenged companies to reduce emissions by 80 per cent by 2050. These efforts mean that that utilities and organisations in general have to monitor their energy use and become more conscientious. The CRC scheme, for example, expects all companies to eventually be able to buy the carbon allowances they need each year.

Confronted by the potentially dire consequences of global warming, political leaders and industry regulators are turning to utilities for environmental leadership to help evaluate and implement programmes to alter historic consumption patterns. Governments are also promoting green investments with incentives and financial aid for businesses, further supporting the drive to lower carbon emissions. Leaders are asking for new and effective conservation initiatives, and want utilities to do more than encourage conservation. This time, they want programmes like demand response and critical peak pricing - programmes which will be reinforced through the billing system.

Despite consistent educational efforts by utilities, consumers rarely, if ever, choose a new home based on the efficiency of its appliances or insulation, despite their high return on investment. As such, surveys consistently show high levels of public support for more sustainable devices, but when it comes time to buy them, few do.

The Growing Demand of Electric Vehicles

One initiative of growing significance is e-mobility and the increasing popularity of electric vehicles (EVs) to help reduce carbon emissions and provide a sustainable method of transport. Europe's Green Car initiative aims to boost the automotive industry and support the development of new, sustainable forms of road transport. This will have a great impact on the drive to reduce emissions, as it has been seen that, in general, even vehicles powered by coal-generated electricity have fewer total fuel-associated air emissions than petroleum-powered vehicles. Emissions can even drop to zero when electricity comes from nuclear or renewable sources. As such, many major car manufacturers are introducing EVs for consumer transportation and analysts are predicting that EVs will take over five to eight per cent of automobile sales by 2020 and 15 to 20 per cent by 2030.

The increasing use of EVs will put excessive pressure on energy grids, as large volumes of electricity will need to be directed to charging points and outages must be prevented. As such, implementation of a smart grid will be critical to meeting the electricity requirements of new vehicles and ensuring their successful deployment. Electric utilities will have the opportunity, and the challenge, to fuel these vehicles, and are making plans to accommodate the associated increases in demand for energy. Experts believe that utilities will need to be heavily involved in recharging because the costs and risks for EV-related businesses (recharger sales and installation services, for instance) may be too high and require public support. This could result in regulatory mandates on utilities to sell and install rechargers - at least until demand reaches a commercial level. They also believe that the recharging of vehicles should be considered the "sale" of electricity. If that is the case, then regulated utilities might be required to own commercial recharging stations. However, others believe that recharging will be declared a service powered by electricity and that equipment will be sold through auto dealers or hardware or home improvement stores and installed by licensed electricians. Whichever way recharging is handled, it will put enormous pressure on the energy grid to ensure that recharging stations are prepared to handle fluctuating demand at peak times.

Some utilities are preparing for increased EV use by calculating the probable effect of various levels of EV ownership on distribution infrastructure, in order to determine and safeguard against a surge in demand when many EVs recharge in specific areas. Utilities are analysing the viability of various methods to ensure level loads when this occurs. They are also striving to keep abreast of the number and location of EVs via arrangements with local motor vehicle registries, and liaising with regulators, manufacturers and local governments regarding EV infrastructure and pilot programs for commercial recharging stations.

Critically, reliable and efficient software, such as the Oracle Utilities Network Management System (NMS), is required to provide diagnostic and predictive capabilities related to EV refuelling. The NMS Feeder Load Management function addresses anticipated electricity flow as the number of EVs increases, as well as tackling scenarios in which EV batteries feed electricity back into the distribution network. Additionally, NMS provides optimisation capabilities that can determine the best mix of energy resources required to handle changing voltage requirements within certain areas.

Green Billing to Accurately Assess Energy Use

An important point for utilities to consider is how to accurately bill the energy usage at recharging stations, either commercial or residential. Billing is of growing importance for environmentally aware customers in addition to being a mission critical operation for utilities. By combining environmental and financial information, "green billing" helps customers understand the long-term environmental effects of their personal energy use. Green billing is an integral part of the increase of EVs on the road as, in order to contribute to the drive for emission reduction, it is vital that consumers are aware of the cost on the environment as well as monetary costs.

In order to record and analyse this financial and environmental information, and share it with consumers, an intelligent customer information system (CIS), supported by a smart grid infrastructure, is necessary. Not only will this technology enable better forecasting and management of the energy demands placed on the grid throughout the roll-out of battery charging points, but it will also play a key role in providing customers with a clear view of the relationship between consumption and environment.

To achieve this, the CIS must be robust and flexible and able to handle, among other things, "carbon footprint" analysis. CIS must show customers graphically, through web portals for example, the relationship between greenhouse gas emissions, their personal choice of supply, and, if appropriate, their time of use. This information will enable and empower the consumer to take a step towards understanding and reducing their carbon footprint, as well as enabling them to choose an energy supplier based on environmental impact, or alter their energy usage to reduce their bills.

Additionally, billing systems will need to be flexible and responsive to rates that vary frequently, as some studies suggest that varying flat rates monthly rather than annually, or bi-annually, can substantially reduce peak demand. This cost incentive will result in consumers using energy at off peak times to gain better rates and may also prevent excessive usage. Similarly, time-of-use pricing encourages customers to shift optional electricity use to off-peak hours and historic usage graphs will allow customers to track their progress over time. Also, in order to limit overall consumption, prepaid metering can be deployed for customers who can then determine their own consumption limits. 

In order to implement incentives and perform regulator-mandated rebates, the CIS must analyse bills before and after the installation of energy efficient equipment in order to assess usage and ensure payment, in the form of rebates, is only provided to consumers who meet the minimum expectation of reduced electricity use.

Interval and Feed-In Billing to Further Reduce Energy Use

A far more dramatic step which has been taken in some regions to help reduce greenhouse gas emissions is interval billing. Although its roll-out across Europe is still to be confirmed, it is currently being assessed in North America. Interval billing provides help with high bills, as graphs of interval bills will readily reveal patterns of use. Utilities can use this information to help customers identify sub-optimal electricity use and adopt conservation alternatives. This will also enable the detection of anomalies and expose attempts at theft by detecting unusual consumption patterns for households. Interval billing also enlarges the scope of conservation options by enabling further programmes such as demand response, which increases the price of electricity during peak periods to encourage conservation and appliance time-shifting. However, few if any utilities can accommodate universal interval billing with current IT systems and many are likely to find themselves overwhelmed by the onslaught of terabytes of new data that will ultimately follow.

The systems used by utilities will also need to be able to cope with feed-in billing for renewable energy. This scheme, recently implemented in the UK, encourages energy suppliers to make regular payments to consumers that generate their own electricity from renewable or low carbon sources, such as solar electricity panels or wind turbines. It guarantees a minimum payment for all electricity generated by these methods, as well as a separate payment for the electricity exported to grid, on top of overall the savings made by using the electricity generated on-site. Feed-in tariffs are designed so that the average monthly income from a renewable energy installation will be significantly greater than any monthly loan repayments for installing the technology. The scheme is being promoted across the UK as a bargaining tool to encourage businesses to use new methods for power generation and invest in green initiatives.

Strategic Steps towards Customer Engagement

These strategic steps represent an array of relatively small changes likely to be required as regulators, utilities, and customers move forward with programmes to reduce greenhouse gas emissions. Each programme alone, and eventually in combination, will put enormous pressure on existing IT infrastructure within utilities as well as create great demand for the energy grid.

Oracle's Smart Grid solution as a whole provides a robust architecture and the data handling capabilities necessary to deal with the addition of this new and data-heavy market opportunity. A number of the individual applications within that solution, including Customer Care and Billing, Meter Data Management, Rate Management, Complex Event Processing, and Load Analysis, handle tasks such as programme development, marketing, processing, and evaluation in addition to the rigorous complex billing and metering processes vital to success.

Only once the systems and processes are in place can 'green billing' become part of a utility's larger role - without a solid technological foundation the utility will struggle to meet all the requirements of the overall aim to monitor and control energy use. Once this is addressed, utilities can begin contributing to community interests while meeting customer satisfaction goals. It is clear to utilities that half-hearted "education" programmes have little if any permanent effect on consumer and commercial consumption. To make a difference, utilities must illustrate significant financial savings and provide incentives to customers as well as weave the conservation mission into fundamental business processes, especially billing.