Smart Metering and Net Metering in Singapore and the U.S.

In an ideal smart grid system, energy users have a “smart meter” that tracks their energy consumption (and how much it’s costing them) in real time and allows them to make adjustments accordingly.  In addition, ample renewable power is available on the grid, and renewable power producers can sell their excess power back to the grid easily through “net metering.”  As smart grids slowly emerge across the globe with a patchwork of features, we discover some exciting new projects and programs, as well as some generous room for improvement.

The Southeast Asian island city-state of Singapore recently announced that its Energy Market Authority (EMA) is launching a three-year pilot project aimed at helping households and businesses save more on electricity bills.  EMA’s “Intelligent Energy System” project will develop smart electric grid solutions including the deployment of more smart meters that provide households with real-time information on electricity usage. Such information can help residents shift demand away from peak periods. The smart grid also will ensure reliability in electricity supply, using renewable energy sources, and will allow electric cars to be used as an energy storage system to feed power back to the grid during peak periods, also known as V2G (Vehicle-to-Grid).

As far as generation of renewable energy goes, according to AsiaIsGreen.com, Singapore has been putting in much effort to attract renewable energy companies to Singapore, yet the local adoption of renewable energy has been lackluster. There are no renewable energy targets specified by the government and the lack of subsidies for the technology means that renewable energy is still not price competitive with conventional forms.  The government prefers to have local adoption of renewable energy (as opposed to piping it in) because they believe it is an investment for the future, ensures energy security and retains talent, creating jobs.  Perhaps one of the key hurdles in Singapore is the intense urban density of the city, which offers few viable places to erect solar panels and wind turbines.

Meanwhile, American cities are making their own strides toward a smart grid.  As far as smart metering goes, as of January in 2009, smart meters represented 4.7% of installed meters in the U.S., up from 1% in 2006, according to a Federal Energy Regulatory Commission (FERC) report on demand response and advanced metering programs.  In February of 2007, the Los Angeles Department of Water and Power (LADWP), the largest municipal utility in the U.S. with close to 1.5 million customers, announced that it would expand its advanced metering infrastructure serving its commercial and industrial customers. LADWP had already purchased 9,000 smart meters as part of an earlier deployment initiative completed in 2004.  The utility awarded the new contract to SmartSynch, a provider of wireless smart meters, who will supply 6,000 such meters to the utility, to operate on AT&T’s wireless data network.

While American utilities are beginning to track energy use and are expanding renewable energy production, overall rates of net metering adoption (allowing solar panel owners to sell energy back to the grid) leave something to be desired.  A new report from the Network for New Energy Choices highlights net metering standards for various U.S. states. “Freeing the Grid 2009” (pdf, 2.4 MB) shows that 27 U.S. states received A or B grades in net metering standards, up from 13 in 2007. While Oregon was lauded in the report for its best practices in net-metering, eight states – Alabama, Alaska, Idaho, Mississippi, South Carolina, South Dakota, Tennessee and Texas – still have no net-metering program at all and 15 states received a failing grade.  That means nearly half of all U.S. states fail to provide adequate net metering programs, according to the report.

Clearly if U.S. communities hope to reduce carbon emissions, the utilities will have to adopt policies that encourage the installation of solar and wind technologies (net metering).  They will also have to invest in tools that actually measure how much electricity is being used.  Nearly 95% of all U.S. utilities currently employ energy management practices akin to trying to manage weight without owning a scale. Perhaps by looking to cities like Singapore as a model, American cities can learn how to generate tax revenue via smart metering investments, while Singapore may have to consider renewable energy goals like LA’s, even if it means importing solar power.