Hottest Issues in Smart Grid, Part 1: Data Access Versus Security

by Adam James

Talk about the promise of a Smart Grid has exploded. While progress has been solid, it is also incremental, with projects spreading across clusters of markets and communities at different levels of sophistication.

While President Obama’s Grid 21 and Better Buildings Initiative prove this issue is being taken seriously, the wildfire spread of the discussion has outpaced a general understanding of what the Smart Grid is and what some of the key debates are. This series will highlight some of the big sticking points and the arguments that underlie them.

A Quick Definition of the Smart Grid

The phrase “Smart Grid’” can be misleading, since that implies we are working to a particular endpoint. What is actually happening is that we are progressively developing a smarter and smarter grid as new technology development and policy mechanisms spark changes within the system. For example, widespread smart meter roll out has been happening nationwide for some time. Incorporating renewable energy into the existing electricity generation structure has been steadily gaining momentum. The development of newer and better batteries has revolutionized storage capacity. That’s not all; the proliferation of Energy Star rated appliances shows efficiency is becoming a higher and higher priority among consumers.

Tying all those elements together in a coordinated way is what makes the Smart Grid truly “smart.”

Issue 1: Secure vs. Accessible Data

The “smart” component to the grid is the communication between its various parts. These communications will yield vast amounts of data about electricity users. Where utilities used to collect 1 data point about each consumer per year, they will soon be collecting over 6,500 per consumer, per year. All this information, paired with unclear ownership rules, creates a quandary for those in the Smart Grid field.

On one hand, this data can be mined to create inferences about your preferences, behaviors, and desires, which many Americans are uncomfortable having shipped out to the highest bidder. What appliances you use and when, what you watch on TV and search for on the Internet, when you are home and how often; all of these variables can be extracted from careful examination of electronic signatures.

On the other hand, this data unlocks massive potential for consumer empowerment. Real time information about energy use will make each user the master of their domain. Adjustable settings for your home can ensure that the AC and heating doesn’t run when you aren’t home, that your refrigerator gets power 24/7 but your TV does only when you use it, that you will allow your thermostat to ‘float’ an extra degree or two, for which you will receive monetary compensation for alleviating peak demand.

The tension begins with ownership. The meter which measures energy usage is technically the property of the utility, but the information that they are tracking is about you and your habits. Does the utility own the data because they own the meter? If so, can they sell it to third parties? Will they disclose it to consumers free of charge? If the individual owns it, is the utility permitted to look through it? How does the individual get the data off the meter?

There is a reasonable minimum threshold on the ownership question, determined since the utility needs a certain amount of information to do their job effectively. The whole purpose of metering is to track energy use to determine demand and rates. While strides in communications and technology will increasingly automate this system; that data still is central to the utility business model. So the ownership spectrum will run from “shared between individuals and utilities” to “solely utility owned,” since “solely individually” owned isn’t a credible option.

There is a common opinion that the closer you move to shared (but mostly individual) owned data, the harder it is to incentivize innovation based on creative uses of data (such as smart thermostats and water heaters). This is not entirely true. Perhaps if the data were public record, there would be a feeding frenzy of innovative start-ups that would rush to mine that information. But the popular backlash for exposing private information in that manner would also be severe. Similarly, only opening up the data to the highest bidder would restrict solutions and innovation to a select few companies.

A Possible Compromise?

There is a middle ground that would preserve consumer protection while enabling utilities to do their jobs effectively and ensure that the innovation that makes America great can take root. Data could belong to the consumer, but be viewed by the utility “blind” and in aggregate. This would make the specific energy usage of each home (the inferences you can make from the energy ‘signature’) the property of the homeowner, but the data over the scope of a utilities territory readable. This way, third parties could work with utilities for access to aggregate data to improve their top-level technologies, and with individuals to craft the specific functions of their technologies.

It is important to remember that this is not a new challenge; in fact, it is the same hurdle that was faced by users of Facebook and online banking. The reality has been that by using the service, you waive a degree of privacy, but you have an expectation that different kinds of information still have various levels of security. While your name, address, and favorite band might be up for grabs, your bank account routing number is not. It seems reasonable that this same sliding scale could apply to data: you understand that by having electricity running through your home that you waive a degree of privacy about your macro-level consumption trends. However, your specific habits should be at your discretion to divulge.

In order for a legal framework for data ownership to be successful, it must reflect the needs of stakeholders in the Smart Grid space. If a policy is too harmful to utility rate structures and business models, it will hamstring the rollout of better technologies. If it plays fast and loose with individual privacy rights, distrust towards the new and emerging systems will evolve. If it is too inhibitive towards third party innovators, America risks being left behind in the global marketplace. Striking the right balance requires recognizing the needs and rights of each of these entities, which the “blind aggregation model” successfully incorporates.

Next, in this series: “Standards and Interoperability: Doing it fast v. Doing it right”

Adam James is a special assistant for energy policy at the Center for American Progress


4 Responses to Hottest Issues in Smart Grid, Part 1: Data Access Versus Security

  1. Mike Oldak says:

    Actually utilities have always had 12 data points (one bill/month) and with 15 minute reads we’re talking ~35,000/year. The question on who owns the data may be a red herring, since regulated utilities will do what the public utility commissions tell them to do with the data. Since this issue first arose in the 90s with retail competition, state commissions have been quite clear that utilities must keep consumer data private and secure. Todate, there haven’t been any complaints to commissions that utilities have wilfully violate this trust. Similarly, unregulated cooperatively- or municipally-owned utilities will listen to their member/owners.

    Many state commissions are already making decisions finding that utilities are entitled to access the type of information that they need to optimize the electric service and plan for tomorrow’s grid. For non-utiltiy functions, access by 3rd parties is strickly up to the consumers.

    As for the type of information that can reveal what type of appliances you’re using or maybe even what TV show you’re watching, that type of granularity is exactly the type that utilities DON’T want, nor do they want to build a network designed to transmit and store. Most utilities want the sum total of kWh in an hour, a few states that want to tie usage to wholesale market prices want the sum total in 15 minute increments. To read appliance signatures I believe you would need to see the real time second by second energy usage with over 2 million data points per year. When commissions authorize such data flows, it should be from the meter directly to the consumer.

    But to your point, I think we’ve only seen the tip of the ice berg in terms of what consumers can and should do with their data, I’d love all of my set top boxes to go really dark when I’m not using them. And the ability for consumers to allow the utility to reset their thermostats by just a few degrees on the hottest days of the year will ultimately save billions for consumers in avoided or delayed power plants. Even for those who don’t change their thermostats!

    But don’t forget the operational savings that will also be passed thru to consumers. When consumers turn on their AC, electric water heaters, EV chargers, pool pumps and other major appliances ALL AT THE SAME TIME, utilities must upgrade existing infrastructure (which consumers ultimately pay for). Engaging consumers to once again allow the utility to help manage or really cycle all these appliances in order to provide the same service but in a more optimized manner will help keep rates from rising by avoiding distribution infrastructure upgrades and ensuring the use of more efficient generation. It will also allow the utility to keep the distribution network in balance when a passing cloud blocks solar panels. Instead of spinning reserves, utilities can turn off water heaters locally and keep supply and demand in balance.

  2. prokaryotes says:

    Another short defintion

    A smart grid is a digitally enabled electrical grid that gathers, distributes, and acts on information about the behavior of all participants (suppliers and consumers) in order to improve the efficiency, reliability, economics, and sustainability of electricity services.

    Smart grid policy is organized in Europe as Smart Grid European Technology Platform.[1] Policy in the United States is described in 42 U.S.C. ch.152 subch.IX § 17381.

  3. prokaryotes says:

    German article about how consumer and energy companies can betetr work together. For instance you get a bonus when washign your dishes or clothes during odd hours :)

    If consumers know too much
    Therefore, the promise of load-dependent rates is in the room: who then dries his laundry in the future, if the factories make a break, could rejoice over savings. California has been about the end of his current concerns as the deadline to offer dynamic prices.

    But how does such a direct feedback effect on the stability of the networks? What happens when many people do the same thing at the same time? Electricity and water suppliers already know the effect, as when in the half time break of the World Cup semi-final while Germany visits the toilet. Three researchers at MIT now have the volatility of electricity grids examined . How does an intelligent network of feedback mechanisms, and how to avoid nasty side effects?

  4. J4zonian says:

    I will likely have the opposite role here that I do discussing this with people in my permaculture/transition community. They bring up not only data privacy but the issue of bodily sensitivity to wireless technology. This has been ignored by most utilities and proponents of smart meters, etc. while the utilities are busily installing the meters against many homeowners’ wills. I end up taking the position that we’re faced with such a dire emergency we have to embrace some things we wouldn’t otherwise, but we should do everything we can to ensure safety and health–fiberoptics instead of wireless, for example, and the kind of differential information availability you mention… Actually my position is the same here, I just feel like I will be disagreed with from the other side. But the top-down uncaring/ unbelieving/ insensitive “solutions” of coal, oil, and nuclear are exactly what we’re trying to get away from with renewables, isn’t it?